Wall Street Hesitates to Cheer Court Ruling Blocking Tariffs
"The ruling added to uncertainty facing companies and consumers, but investors were encouraged that it could slow momentum for a trade war that threatened economic and corporate growth.
S&P 500
Stocks were unsteady on Thursday, beginning the day with a gain before sliding into the afternoon, after Wall Street’s initially upbeat reaction to a ruling against President Trump’s trade policy quickly gave way to doubts about the long-term impact of the decision.
On Wednesday, a panel of U.S. judges had blocked Mr. Trump from imposing some of his steepest tariffs, which have threatened to squeeze consumers, snarl supply chains and dent corporate earnings.
The ruling is a setback to Mr. Trump’s plans to use tariffs as a cudgel, as his administration negotiates new trade deals with dozens of countries, but the White House rushed to ask the court to stay the decision, leaving investors, as well as businesses leaders and consumers, in limbo. Trump administration officials also said that the ruling would not dissuade the administration and that they had other avenues for pursuing tariffs. “Nothing’s really changed,” Peter Navarro, trade adviser to the president, told Bloomberg.
The S&P 500 index had risen as much as 2 percent in overnight trading before the gains faded. By midday, the index was slightly lower.
“While the decision offers potential short-term tariff relief, it introduces greater ambiguity around the future direction of US trade policy, particularly as the ruling faces appeal,” said Gregory Daco, chief economist at EY.
Stocks in Hong Kong, Japan and South Korea all rose more than 1 percent. But in Europe, the response was more muted, with benchmarks across the region mixed between small gains and losses.
Analysts warned that markets were likely to continue swinging up and down on tariff developments, as investors now parse court rulings and appeals in addition to Mr. Trump’s threats, delays and concessions.
Analysts at Panmure Liberum noted that the court ruling suggested that in the long run, “extreme tariffs and rapidly changing tariffs are less likely to happen going forward, which reduces uncertainty somewhat.” But in the short term, they said, the ruling and subsequent challenges to it “will add significant uncertainty to the mix, making it even harder for U.S. businesses to plan.”
Best Buy slumped almost 10 percent on Thursday after cutting its profit target for 2025 and telling analysts that it may have lost some market share in the first three months of the year.
“As we look to the rest of the year, there is still uncertainty related to tariff levels, timing and countries involved in addition to the potential actions of others in the industry, as well as the potential reaction of American consumers,” said Corie Barry, chief executive of Best Buy.
Macy’s, despite beating analysts expectations for its earnings released on Wednesday, also fell Thursday, as analysts weighed up the company’s better-than-expected performance last quarter against warnings from its chief executive, Tony Spring, about the pressure on Macy’s customers.
Bucking the trend, Nvidia, the chip giant, reported strong earnings growth Wednesday evening and suggested that the tech industry’s embrace of artificial intelligence had ample room to run. Its stock, which exerts an outsize influence over major indexes, surged 5 percent.
Jason Karaian is the business news director, based in London. He was previously the editor of DealBook.
Joe Rennison writes about financial markets, a beat that ranges from chronicling the vagaries of the stock market to explaining the often-inscrutable trading decisions of Wall Street insiders."
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