Stocks rise amid Nvidia rally and tariff reversal

[UNITED STATES] US stocks closed modestly higher on Thursday, buoyed by Nvidia’s 3.2% gain following strong quarterly sales results. Investors were largely focused on Nvidia’s performance, especially as it warned of an $8 billion hit from upcoming US export restrictions on AI chips to China. Meanwhile, trading remained choppy as the market processed a sudden appeals court ruling that reinstated wide-ranging tariffs imposed during Donald Trump’s presidency—a reversal of a trade court’s earlier block just a day before.

Despite Nvidia’s strong showing, other major names like Salesforce weighed on the market, falling 3.3% even after raising its annual revenue and profit forecasts. Boeing shares also rose 3.3% after the company announced plans to ramp up production of its 737 MAX jets. On the economic front, US GDP contracted by 0.2% in the first quarter, slightly better than the 0.3% contraction economists had forecast, while retail giant Best Buy’s shares dropped 7.3% after it cut its annual outlook, citing concerns over the impact of tariffs on consumer spending.

The broader indexes reflected these mixed signals: the Dow Jones rose 0.28%, the S&P 500 climbed 0.40%, and the Nasdaq gained 0.39%. Even as trade tensions continue to affect markets, analysts noted that Trump’s tariffs often lose sting over time due to repeated postponements, a pattern encapsulated by the Financial Times’ acronym “TACO” (“Trump Always Chickens Out”). Still, some observers argue that the administration has scored incremental wins on trade, even if the broader market impact remains subdued.

Implications

For Businesses: Companies reliant on global supply chains, particularly in tech and manufacturing, now face renewed uncertainty as Trump-era tariffs are reinstated. Nvidia’s proactive stockpiling of AI chips signals that firms are adjusting supply strategies ahead of potential policy shifts, but not all sectors are as nimble. Boeing’s planned production boost shows some optimism in industrial sectors, but retail and consumer electronics, like Best Buy, are bracing for weaker demand as tariffs push up prices.

For Consumers: Shoppers may soon feel the pinch, especially on big-ticket items such as electronics, appliances, and cars. Best Buy’s lowered forecasts highlight how tariffs can translate into higher prices or reduced product availability. Over time, if tariffs ripple through the economy, households could face broader inflationary pressures, even as wage gains and job growth show mixed signals.

For Public Policy: The court’s reinstatement of sweeping tariffs revives key debates about the effectiveness and costs of protectionist trade policies. While some argue Trump’s tactics have yielded small wins, the broader economic impact remains contested, particularly given the market’s resilience and tendency to discount tariff threats. Policymakers will need to navigate between protecting domestic industries and maintaining stable consumer prices, especially ahead of the 2026 election cycle.

What We Think

This moment underscores the tug-of-war between headline-driven market reactions and long-term fundamentals. While Nvidia’s rally highlights the excitement around AI and corporate earnings, the underlying risks from shifting trade policies cannot be ignored. Investors appear increasingly skilled at tuning out tariff drama, but that doesn’t mean the real-world impacts on supply chains and consumer costs are negligible.

The “TACO” phenomenon—Trump Always Chickens Out—reflects a market culture that has learned to shrug off threats of sweeping tariffs, assuming they will soften or delay. But as courts step back in, those assumptions may face new tests. Businesses need to think beyond political cycles and build resilience against unpredictable trade environments.

For policymakers, the challenge is balancing trade leverage without destabilizing domestic markets or punishing consumers. Meanwhile, investors should watch not just megacap tech results but also the health of the broader consumer sector, which may be more vulnerable to tariff-related pressures.

In short, while corporate earnings and AI-driven optimism are currently masking deeper concerns, the underlying structural issues of trade policy and global supply remain potent—and may surface more sharply in the months ahead.