Global stocks rose while the US dollar weakened after giving up earlier gains against major peers yesterday as markets digested the surprise ruling of a trade court that blocked President Donald Trump’s so-called ‘Liberation Day’ tariffs.
The US Court of International Trade issued a ruling late on Wednesday that Trump overstepped his authority by imposing across-the-board duties on imports from trading partners.
The decision triggered a court battle that would likely weigh on markets, after the Trump administration swiftly appealed the ruling and appeared poised to fight up to the Supreme Court if needed.
On Wall Street, all three indexes were trading higher after losing ground in the previous session, indicating that markets largely view the decision in a positive light. Nvidia was up 4 per cent after reporting earnings that beat expectations after markets closed on Wednesday.
The Dow Jones Industrial Average rose 0.11pc to 42,146.94, the S&P 500 rose 0.32pc to 5,907.51 and the Nasdaq Composite rose 0.48pc to 19,192.11.
Europe’s STOXX 600 index was down 0.13pc, after rising earlier in the session. MSCI’s broadest index of Asia-Pacific shares outside Japan closed up 0.77pc overnight.
MSCI’s gauge of stocks across the globe rose 0.42pc to 880.05.
“The court striking down Trump’s tariffs is more than just a speed bump,” said Brian Jacobsen, chief economist at Annex Wealth Management in Wisconsin. “While President Trump can appeal the ruling or try to side-step it, those options are limited and may end up giving the same result. Stock markets like the ruling.”
Senior Trump administration officials, however, downplayed the impact of the trade court ruling, expressing confidence it would be overturned on appeal and insisting there are other legal avenues to employ in the interim.
White House economic adviser Kevin Hassett expressed confidence that the ruling would ultimately be reversed in an interview with Fox Business yesterday. He also said it would not get in the way of signing new trade deals.
The US dollar had initially risen against safe-haven currencies following news of the court decision, but it has since pared those gains.
Data showed that labour market conditions continue to ease, as the number of Americans seeking unemployment benefits increased more than expected last week.
The dollar weakened 0.35pc to 144.31 against the Japanese yen and was down 0.42pc to 0.824 against the Swiss franc. The euro was up 0.56pc at $1.1355.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.95pc to 99.44.
US Treasury yields, which have been under pressure with investors unnerved by Trump’s hefty tax and spend bill, initially rose yesterday but retreated.
The yield on benchmark US 10-year notes fell 3.1 basis points to 4.448pc. The 30-year bond yield fell 2.6 basis points to 4.9521pc.
Oil prices fell, retreating from earlier gains, after the International Energy Agency’s director warned of weaker demand in China and as markets eyed possible US sanctions on Russian crude flows.
Brent crude futures dropped 1.53pc to $64.91 a barrel. US West Texas Intermediate crude fell 1.89pc to $60.67 a barrel.
Gold prices rose in volatile trading partly aided by the softer jobs data. Spot gold rose 0.74pc to $3,313.77 an ounce. US gold futures rose 0.49pc to $3,311.10 an ounce.
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