US stock futures surged in premarket trading on Thursday, May 29, 2025, driven by two major developments: a federal court’s blocking of Trump’s sweeping global tariffs and Nvidia’s (NASDAQ:NVDA) stronger-than-expected quarterly earnings despite export control challenges. These positive catalysts are fueling investor optimism about economic stability and continued AI sector growth.
Federal Court Delivers Major Blow to Trump’s Tariff Strategy
A US federal court has blocked President Donald Trump’s sweeping global trade tariffs, delivering a major setback to a key component of his economic policies. The Court of International Trade ruled that an emergency law invoked by the White House did not give the president unilateral authority to impose tariffs on nearly every country in the world.
The New York-based court determined that the US Constitution gave Congress exclusive powers to regulate commerce with other nations, and that this authority was not superseded by the president’s remit to safeguard the economy.
The ruling was based on two separate cases brought by the nonpartisan Liberty Justice Center on behalf of several small businesses that import goods, and a coalition of US state governments challenging the import taxes.
A three-judge panel ruled that the International Emergency Economic Powers Act (IEEPA), a 1977 law that Trump cited to justify the tariffs, did not provide him the power to impose the sweeping import taxes. The court also blocked a separate set of levies the Trump administration imposed on China, Mexico, and Canada in response to what the administration characterized as unacceptable flows of drugs and illegal immigrants into the US.
The Trump administration announced it would appeal within minutes of the ruling, with White House deputy press secretary Kush Desai stating, “It is not for unelected judges to decide how to properly address a national emergency.”
However, New York Attorney General Letitia James, representing one of 12 states involved in the lawsuit, welcomed the decision, emphasizing that “no president has the power to single-handedly raise taxes whenever they like.”
Market Benefits from Tariff Ruling and Economic Stability
The court’s decision provides significant relief for businesses and consumers who faced the prospect of substantial price increases due to Trump’s tariff regime. The ruling blocked Trump’s “Liberation Day” tariffs, which included a 10% baseline tariff on most countries and steeper reciprocal tariffs on dozens of nations and blocs, including the EU, UK, Canada, Mexico, and China.
Global markets responded positively to the ruling, with stock markets in Asia rising Thursday morning and US stock futures jumping significantly. The US dollar made gains against safe-haven peers, including the Japanese yen and Swiss franc, reflecting investor confidence in economic stability. Market analysts viewed the decision as removing a significant source of uncertainty that had been weighing on investor sentiment.
The White House has 10 days to complete the bureaucratic process of halting the tariffs, although most are currently suspended anyway. If all courts uphold the ruling through the appeals process, businesses that have paid tariffs will receive refunds on amounts paid, with interest.
This includes the so-called reciprocal tariffs, which were lowered to 10% across the board for most countries and raised to 145% on Chinese products, now at 30%.
Nvidia Delivers Strong Results Despite Export Control Headwinds
Nvidia posted strong quarterly earnings on Wednesday, beating Wall Street’s expectations despite new export controls imposed by the Trump administration limiting the sale of some advanced chips to China. The powerhouse chipmaker, central to the artificial intelligence boom, saw quarterly revenue grow 69% year-over-year, increasing from $26 billion in the first quarter of 2024 to $44 billion in the first quarter of 2025.
The company’s data center business, which drives much of its AI-related revenue, saw revenue rise 73% over the same period, growing from $22.6 billion to $39.1 billion, although it fell just short of market forecasts for the segment. Despite this slight miss, the overall performance demonstrated Nvidia’s resilience in the face of regulatory challenges.
Nvidia CEO Jensen Huang emphasized the strength of global AI demand, stating, “Global demand for NVIDIA’s AI infrastructure is incredibly strong.
AI inference token generation has surged tenfold in just one year, and as AI agents become mainstream, the demand for AI computing will accelerate.” He added that “countries around the world are recognizing AI as essential infrastructure — just like electricity and the internet — and NVIDIA stands at the center of this profound transformation.”
The company faced a $4.5 billion charge in the first quarter due to new restrictions that blocked the chipmaker from exporting its H20 graphics processing units to China.
As a result, earnings per share came in below expectations at $0.81, which Nvidia attributed to the impact of export controls. Without the additional charge and related tax impacts, Nvidia indicated its earnings per share would have surpassed forecasts at $0.96, highlighting the underlying strength of the business.
Robust Premarket Performance Across Major Indices
US stock futures showed strong gains across all major indices as of 6:05 AM EDT on Thursday, May 29, 2025, reflecting investor enthusiasm for both the tariff ruling and Nvidia’s earnings performance. Dow Jones Industrial Average futures jumped 309.3 points to 42,470, representing a significant 500-point gain from the previous close and indicating a strong market opening.
S&P 500 futures rose 78.2 points to 5,979.75, while NASDAQ futures gained 395.83 points to 21,767, demonstrating broad-based optimism across growth and technology sectors. The Russell 2000 futures also participated in the rally, gaining 27.1 points to 2,099.9, suggesting small-cap stocks were also benefiting from the positive sentiment.
Asian markets provided additional confirmation of global investor confidence, with the Hang Seng Index rising 1.35% to 23,573.38 and Japan’s Nikkei gaining 1.88% to 38,432.98. European markets also showed positive momentum, with Germany’s DAX rising 0.43% and France’s CAC 40 gaining 0.69%, indicating sustained international optimism about the developments.
The VIX volatility index declined 2.59% to 18.81, reflecting reduced market anxiety and increased investor confidence. Commodity markets also responded positively, with WTI crude oil rising 1.47% to $62.75 per barrel, while gold declined slightly by 0.35% to $3,283.30 per ounce as investors moved away from safe-haven assets toward riskier investments.
Technology Sector Leadership and Future Outlook
The technology sector is poised to lead Thursday’s market gains, with Nvidia’s strong earnings performance likely to benefit other AI and semiconductor companies. The combination of reduced tariff uncertainty and continued AI sector strength creates a favorable environment for technology stocks, which have been under pressure from both trade tensions and regulatory concerns.
Nvidia’s ability to deliver strong results despite facing $4.5 billion in export control-related charges demonstrates the underlying strength of AI demand globally. The company expects another $8 billion loss in the second quarter from chip restrictions, but the robust underlying business performance suggests the sector’s long-term growth trajectory remains intact.
The court’s tariff ruling removes a significant overhang that had been weighing on multinational technology companies, many of which rely on global supply chains and international sales. The decision provides clarity and reduces the risk of escalating trade tensions that could disrupt technology sector operations and profitability.
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Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.
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