A federal court ruling that mostly overturned President Trump’s tariffs caused a big jump in the stock market, sending futures way up and creating a sense of fresh optimism on Wall Street. The U.S. Court of International Trade decided that President Trump overstepped his legal authority when he put a 10 percent tax and other tariffs on many U.S. trading partners, saying those actions were not valid.
This ruling canceled a wide set of tariffs, including the basic 10 percent tariff, matching tariffs on several countries, a 20 percent tax on China tied to fentanyl, and a 25 percent tax on goods from Canada and Mexico. The court disagreed with the administration’s reading of the International Emergency Economic Powers Act of 1977 (IEEPA), which the administration had used to defend the tariffs. CBS and Reuters detailed many stocks rising.
The court gave the Trump administration ten days to issue new orders ending the tariffs. The administration said it plans to appeal the decision to the Federal Circuit Court of Appeals. The market reacted in a big way right away. Futures for the S&P 500 rose 1.1 percent, while contracts for the Dow Jones Industrial Average and Nasdaq Composite went up 0.5 percent and 1.6 percent, respectively. Trump has claimed people who are against him should be labeled as criminals, so should shareholders be labeled as criminals?
Tariffs are only good for the market when they’re taken down
This good news spread worldwide; European markets, like Germany’s DAX and France’s CAC 40, went higher, and Asian markets also saw big gains, with Japan’s Nikkei 225 jumping 1.9 percent. This upward move shows that investors felt relief after what they saw as major trade barriers were removed. Analysts at Capital Economics said that if the Trump administration loses the appeal, it will reduce the risks of economic slowdown and ease upward pressure on inflation.
The ruling did not affect all industries in the same way. While the overall market was happy, individual companies had mixed results. Nvidia, a big name in AI chips, saw its stock price rise 4.8 percent after reporting strong quarterly sales growth, partly because customers were stockpiling chips ahead of expected U.S. export limits to China. However, the company also said the new export rules would cut its current-quarter sales by $8 billion, showing how complicated the global tech market remains. The Philadelphia SE Semiconductor index, which tracks the broader chip industry, also moved higher.
Other companies had different results. Boeing climbed 3.3 percent after its CEO said it would increase production of 737 MAX jets, while Best Buy dropped a sharp 9.8 percent after cutting its yearly sales and profit forecasts, blaming worries about how tariffs would hurt demand for expensive items. This split shows how the tariff ruling had different effects depending on the industry and specific company situations.
The court’s decision did not cancel all tariffs set by the Trump administration; some taxes on cars, steel, and aluminum stayed in place. White House economic adviser Kevin Hassett said three trade deals were close to being finished and expected more progress despite the court’s ruling, signaling that trade talks would continue. The long-term effects of the decision are still unclear, mostly depending on what happens with the appeal and any future changes to trade policy. The S&P 500, now 3 percent below its record high, shows cautious optimism, especially after recovering from a big drop in April.
The market’s strong performance in May suggests the overall trend might be getting stronger. A second look at GDP data showed a 0.2 percent drop in the first quarter, which was a little better than first thought, but still points to some economic uncertainty. Still, the market’s reaction was mostly positive, with many investors seeing the end of most Trump tariffs as a major plus for the economy and stock market confidence.
Published: May 30, 2025 08:59 am