Stock Market Surges as Court Blocks Trump Tariffs; Nvidia Leads Tech Rally

Market reaction: Futures jump on tariff ruling

Futures for the Dow Jones Industrial Average surged 1.4%, while S&P 500 futures climbed 1.7%, and the Nasdaq 100 soared 2% in premarket trading. The rally follows a US Court of International Trade decision late Wednesday that declared Trump’s "Liberation Day" tariffs—imposed under emergency powers—illegal, citing overreach of executive authority.

The ruling temporarily halts tariffs that had rattled global markets since April, when Trump imposed levies on over 180 countries to combat trade deficits. The White House vowed to appeal, but investors cheered the immediate relief, with analysts noting that the decision removes a key overhang on corporate earnings and supply chains.

Nvidia’s mixed earnings: AI boom vs. China headwinds

Nvidia, the AI chipmaking giant, reported Q1 revenue of $44.1 billion, beating estimates of $43.3 billion, while adjusted EPS of $0.96 surpassed expectations of $0.93. However, the company took a $4.5 billion charge due to US restrictions on H20 chip exports to China, which CEO Jensen Huang called a $50 billion market now "effectively closed" to US firms.

Despite the China setback, Nvidia’s data center revenue grew 73% year-over-year to $39.1 billion, driven by demand for AI infrastructure from Microsoft, Amazon, and Meta. The stock surged 5% in after-hours trading, signaling a premarket breakout above $142.

Other AI-linked stocks also gained:

• Broadcom (AVGO) and Taiwan Semiconductor (TSM) rose in sympathy
• C3.ai (AI) spiked 14% after beating revenue forecasts
• Salesforce (CRM) lifted guidance, boosting cloud software peers

Broader market implications: What’s next for investors?

• Tariff uncertainty lingers: While the court ruling provides short-term relief, the Trump administration’s appeal means volatility could return. Analysts warn that if tariffs are reinstated, sectors like automakers, consumer electronics, and retail—already grappling with higher costs—could face renewed pressure
• Tech sector resilience: Nvidia’s results reaffirmed that AI demand remains robust, even as geopolitical risks mount. Morgan Stanley analysts suggest the bull market may not be over, with tech stocks offering "attractive entry points" after recent pullbacks
• Economic outlook: The Deloitte US Economic Forecast projects 2.6% GDP growth in 2025, but warns that tariffs and inflation could dampen consumer spending. Morningstar revised its GDP forecast downward to 1.2%, citing tariff impacts

Bottom line for investors

In the short term, the recent market rally may continue as optimism builds around the court’s tariff ruling and strong earnings from tech leaders like Nvidia. However, investors should remain cautious, as the Trump administration is expected to appeal the decision and may seek alternative avenues to reimpose trade barriers. Over the long haul, the outlook for AI and data center expansion, driven by Nvidia’s impressive performance, continues to shine. Still, geopolitical risks, especially those tied to China, pose lingering threats to supply chains and revenue projections.

For the average investor, this is a time to be both opportunistic and defensive. It’s wise to diversify across traditionally stable sectors such as healthcare and utilities, which may offer resilience if economic turbulence returns. Meanwhile, any delay in Federal Reserve interest rate cuts—especially if inflation remains sticky—could shift market dynamics yet again. While volatility is likely in the weeks ahead, focusing on companies with pricing power, strong AI capabilities, and robust global demand could offer insulation from broader swings. The upcoming jobs report and Fed commentary will be critical in determining whether this market momentum persists—or fizzles out heading into the summer.