Stocks were mixed on Thursday as Nvidia's
The S&P 500 Index
The U.S. Court of International Trade ruled on Wednesday that Trump exceeded his legal authority when imposing many of his global tariffs, stating that the International Emergency Economic Powers Act (IEEPA) does not give the president "unbounded" power to issue global, retaliatory import duties by executive order. Trump had used the IEEPA as the basis for his tariffs on nations such as Mexico, Canada, and China, claiming their failure to stop illegal drugs and migrants from entering the United States was a threat to the country's national security.
While the ruling temporarily pauses Trump's global "reciprocal" 10% tariff rate and his fentanyl-related duties on China, Canada and Mexico, is does not affect his tariffs on steel, aluminum and automobiles, which were imposed using other legal powers.
Goldman Sachs Chief Economist Jan Hatzius argued in a Thursday note that "this ruling represents a setback for the administration's tariff plans and increases uncertainty, but might not change the final outcome for most major U.S trading partners." Hatzius argued that the White House is likely to appeal the ruling and could use executive power under Section 301 of the Trade Act of 1974 to reimpose the tariffs in question -- the act was the basis for Trump's initial tariffs on China during his first term.
Beyond tariff headlines, Nvidia took much of the market's attention on Thursday after the chipmaker posted another blockbuster quarter, topping Wall Street expectations on both top and bottom lines in its first quarter. The company's key data center business also recorded 73% annual growth, racking in $39.1 billion and accounting for 88% of its total revenue.
Nvidia said it expects $45 billion in sales for its current quarter, noting that its guidance would have been about $8 billion higher expect for lost sales from the U.S.'s recent export restriction on its H20 chips designed for the Chinese market. CEO Jensen Huang told investors during the company's earnings call that China's $50 billion AI chip market is "effectively closed to U.S. industry," and that "the H20 export ban ended our Hopper data center business in China."
On the economic front, initial jobless claims rose to a seasonally adjusted total of 240,000 for the week ending May 24, the Labor Department reported Thursday, rising 14,000 from the previous period and coming in ahead of consensus estimates. Continuing claims, which are tracked a week behind, also rose to their highest levels since Nov. 2021.
The Commerce Department reported on Thursday that U.S. gross domestic product (GDP) contracted at a 0.2% pace in the first quarter. The new estimate, which is adjusted for seasonality and inflation, was 0.1 percentage point below the government's initial rate.
Elsewhere, Best Buy
"Our underlying working assumptions are that tariffs stay at the current levels for the rest of the year, and there is no material change in consumer behaviour from the trends we have seen in recent quarters," CFO Matt Bilunas said in a press release. "As you can imagine, and based on our history, we will continue to scenario-plan and adjust with agility as the situation evolves."
All three major averages are set to end the week and month higher. The S&P 500 and Dow are up about 2% and 1.5% this week, respectively, while the Nasdaq has advanced over 2%. The tech-heavy index has also outperformed the broader market for the month and it on track to close up 10%, while the S&P 500 has added about 6% and Dow has risen nearly 4% for the week.
Looking ahead, market participants will react to key inflation data for April and May's final consumer sentiment reading alongside earnings from companies like Costco
