S&P 500 Rises as Court Blocks Trump Tariffs; Nasdaq Surges on Nvidia’s Strong Earnings

U.S. stocks advanced Thursday after a federal court struck down President Donald Trump’s “reciprocal” tariffs, with Nvidia’s strong earnings further fueling investor optimism.

The S&P 500 climbed 0.5%, the Nasdaq Composite jumped 0.9%, and the Dow Jones Industrial Average edged up by 78 points (0.2%), even as Salesforce shares dropped more than 5% following its earnings report.

The U.S. Court of International Trade ruled Wednesday night that Trump had overstepped his authority with his “reciprocal” tariff orders, ordering the measures to be vacated.

The move soothed investor nerves after weeks of uncertainty over trade policy and inflation. Trump’s tariff threats and shifting trade stances had rattled markets last month, leading some companies to scale back forecasts and warn about the impact on consumer demand.

Paul Stanley, Chief Investment Officer at Granite Bay Wealth Management, commented: “It’s becoming clear that the administration’s rhetoric on tariffs is tougher than its actual policies. That is helping to push stocks higher.”

Despite the court ruling, analysts warned that drawn-out trade negotiations could still cloud the outlook for the rest of the year.

Nvidia Shines on Strong Earnings

Chipmaker Nvidia surged more than 5% after delivering better-than-expected quarterly results, with its data center division posting 73% year-over-year growth.

“Wednesday’s Nvidia earnings report is pivotal not just for Nvidia but for the entire stock market,” said James Demmert, Chief Investment Officer at Main Street Research. “It can rejuvenate investor optimism and shift attention to the power of AI, away from the noise about tariffs and taxes.”

The tech sector has been a standout performer, rising more than 10% in May, boosted by AI developments from major players like Alphabet.

Other Movers and Market Trends

• E.l.f. Beauty soared 9% after strong quarterly earnings, though the company withheld its full-year outlook due to tariff uncertainty.
• HP fell 10% after missing quarterly earnings expectations.
• Best Buy cut its full-year guidance, citing the negative impact of tariffs. Shares dipped more than 1% after the electronics retailer lowered both its sales and earnings forecasts for the year.
• Tesla shares rose nearly 3% after CEO Elon Musk announced he would step down from a government advisory role, easing some investor concerns about his focus.

On the economic front, jobless claims rose more than expected last week, with initial filings reaching 240,000. GDP data showed a 0.2% contraction in the first quarter, slightly better than earlier forecasts, while consumer spending slowed to its weakest pace since Q2 2023.

Asian stocks also moved higher after the U.S. court’s decision. South Korea’s Kospi, Japan’s Nikkei, and Hong Kong’s Hang Seng Index all posted gains, while investors kept a close eye on the impact of Nvidia’s results on Asian chip stocks.

Despite a lackluster session on Wednesday, U.S. indexes are on track for solid weekly and monthly gains. So far in May, the S&P 500 is up 6%, the Dow has added 3.6%, and the Nasdaq has jumped 11%.