AP
- Stocks gained on Thursday after a court blocked President Donald Trump's tariffs.
- However, an appeals court reinstated the tariffs temporarily.
- Stocks also got a boost from Nvidia's first-quarter earnings beat.
Investors were digetsting the latest tariff developments on Thursday, with an appeals court reinstating Donald Trump's tariffs less than 24 hours after a US trade court said they were illegal.
Major indexes ended higher in volatile trading. The Nasdaq 100 got a boost from Nvidia's first-quarter earnings after the bell on Wednesday, though the tech-heavy index gave up the biggest gains throughout Thursday's session.
Here's where US indexes stood at the 4 p.m. closing bell on Thursday:
- S&P 500: 5,912.17, up 0.4%
- Dow Jones Industrial Average: 42,215.73, up 0.3% (+117 points)
- Nasdaq composite: 19,175.87, up 0.4%
In a ruling late Wednesday, the US Court of International Trade found that Trump did not have the power to impose tariffs on many of the US's trading partners. The ruling said it would give the Trump administration 10 days to comply with its order.
"It is not for unelected judges to decide how to properly address a national emergency. President Trump pledged to put America First, and the Administration is committed to using every lever of executive power to address this crisis and restore American Greatness," Kush Desai, a spokesperson for the White House, told Business Insider in an email.
Investors have been antsy all year about the potential impact of tariffs, which economists have said will raise costs for businesses that can be passed along to consumers.
Tariffs could also weigh on economic growth and keep interest rates elevated, as the Federal Reserve will be hesitant to lower borrowing costs to avoid stoking more upward price pressure.
Analysts say that uncertainty is still hanging over the market, despite the boost in sentiment.
"Yet the uncertainty premium remains very much alive. Every forthcoming court milestone carries the potential for fresh headlines," Ahmad Assiri, a research strategist at Pepperstone, wrote in a note on Thursday, pointing to anxieties over the growing US budget deficit.
"This after-hours rally reflected a swift change in sentiment as traders welcomed the prospect of reduced trade headwinds," David Morrison, a senior market analyst at Trade Nation, wrote in a note. "But investors should take care. Markets are extremely skittish at present and capable of big moves in both directions, as demonstrated by the overnight rally. This is not the slow and steady bull market that took off in October 2022."
Trump has incrementally scaled back the majority of his proposed tariffs, a move that the market has coined as the "TACO trade" in recent days. Many of the tariffs he announced on April 2 have been reduced to 10% for a 90-day period as trade negotiations take place. Tariffs on China have also been reduced to 30% on a separate 90-day timeline. A 50% tariff on the EU has been pushed out to July 9, which is when the pause on most of the Liberation Day tariffs expire.
Tech stocks were also on a tear on Thursday as traders took in Nvidia's latest quarterly earnings report. The chipmaker reported $44.06 billion in revenue, beating estimates. CEO Jensen Huang also soothed investors about the impact of restrictions on its business in China.
Nvidia shares rose as much as 6%, before paring gains to trade 3% higher around $139 a share. Other chipmakers also moved higher, with Advanced Micro Devices up 0.15% Taiwan Semiconductor Manufacturing Company up 0.5%.