Markets rally on court block of Trump tariffs

[WORLD] Asian markets and Wall Street futures surged after a U.S. federal court blocked former President Trump’s planned “Liberation Day” tariffs. The Court of International Trade ruled that Trump had exceeded his authority by imposing blanket tariffs on countries with trade surpluses against the U.S. While the White House swiftly appealed, possibly heading to the Supreme Court, markets interpreted this as a potential retreat from aggressive trade measures.

Investors responded by pouring into risk assets: Japan’s Nikkei rose by 1%, South Korean shares climbed 0.8%, and S&P 500 futures jumped 1.5%. Nasdaq futures surged 1.8%, partly buoyed by Nvidia’s strong earnings and optimistic revenue forecasts, which boosted its shares 4.4% after hours. However, investor optimism was tempered by reports that the U.S. is tightening restrictions on selling semiconductor design software and other key technologies to Chinese firms.

In currency and bond markets, the dollar strengthened against safe havens like the Swiss franc and Japanese yen, while U.S. Treasury yields edged up. Expectations for Federal Reserve rate cuts diminished, with traders now seeing only a slim chance of a July cut and a moderate probability for September. Meanwhile, gold prices dipped, and oil prices continued rising due to OPEC+ supply decisions and new U.S. sanctions on Venezuelan crude exports.

Implications for Business, Consumers, and Policy

For businesses, the court’s decision offers temporary relief from heightened tariffs, easing cost pressures for importers and manufacturers that rely on global supply chains. However, the uncertainty of a pending appeal means companies must stay agile, potentially hedging against future trade disruptions if the White House succeeds in reinstating the tariffs. Nvidia’s robust earnings and the broader tech rally also highlight the growing investor appetite for AI-related growth, despite geopolitical tensions with China.

Consumers may see indirect benefits in the short term, as stalled tariffs reduce the risk of price hikes on imported goods. Yet, ongoing U.S.-China technology restrictions signal potential downstream effects on consumer electronics, as supply chains tighten and competition over semiconductor access intensifies. This could eventually lead to higher prices or delayed product releases in sectors like smartphones, laptops, and electric vehicles.

From a policy standpoint, the court’s ruling reinforces legal limits on presidential trade powers, injecting a check on executive overreach in setting economic policy. However, the appeal process keeps the issue alive, and the administration’s parallel push to tighten tech controls on China suggests that even without tariffs, economic decoupling remains a central U.S. strategy. Policymakers must balance legal boundaries, international trade obligations, and national security concerns as they recalibrate their approach.

What We Think

This court ruling marks a critical flashpoint in the ongoing tug-of-war between executive ambition and legal constraint. While markets cheer the pause in tariffs, the underlying message is that U.S. trade policy remains volatile, shaped as much by courtrooms as by White House pronouncements. Investors may welcome short-term gains, but the broader environment of uncertainty will continue to weigh on strategic planning.

The Nvidia surge underscores how investors are betting on tech’s resilience, even as Washington sharpens its tools to restrict China’s access to critical innovation. This dual narrative — optimism in AI-driven growth but caution over geopolitical risks — will define much of the market’s mood in the coming quarters.

At the policy level, the episode reveals the complexity of wielding economic power in a globally interconnected world. Legal boundaries, market reactions, and foreign policy aims are colliding in ways that make neat solutions elusive. Going forward, businesses and consumers alike should prepare for a landscape where trade, tech, and policy are intertwined — and where legal challenges can swing markets as much as political decisions.