U.S. stock futures surged on Thursday following a major court decision that invalidated much of President Donald Trump’s expansive tariff program, alongside encouraging earnings from semiconductor leader Nvidia. Meanwhile, Tesla CEO Elon Musk announced his exit from the Trump administration, stepping down from his role overseeing government efficiency efforts.
Trade Court Blocks Broad Tariffs
In a significant setback to President Trump’s trade strategy, the United States Court of International Trade ruled late Wednesday that his sweeping tariffs on imports from countries with trade surpluses against the U.S. were “invalid as contrary to law.” The court concluded that the president exceeded his authority by imposing broad duties without proper legal grounds.
The Trump administration plans to challenge the ruling by appealing to the U.S. Court of Appeals for the Federal Circuit, with a Supreme Court appeal possible if necessary. It’s important to note that the court did not address certain tariffs on specific industries like steel, aluminum, and automobiles, which were enacted under different legal authority.
If upheld, the ruling could severely limit the administration’s ability to use steep tariffs — ranging from 10% to over 50% — as a negotiating tool with trading partners. This means Washington may have to rely on alternative strategies or slower diplomatic efforts to reach trade agreements.
Nvidia Outperforms Despite Export Restrictions
Nvidia (NASDAQ:NVDA) impressed investors with stronger-than-expected Q1 results, driven by customer stockpiling of AI chips ahead of new U.S. export controls targeting China. The semiconductor giant reported adjusted earnings per share of $0.96 on revenues of $44.06 billion, beating analyst expectations of $0.93 EPS and $43.31 billion revenue.
“Global demand for Nvidia’s AI infrastructure is incredibly strong,” said CEO Jensen Huang. “AI inference token generation has surged tenfold in just one year, and as AI agents become mainstream, the demand for AI computing will accelerate.”
The company absorbed a $4.5 billion hit from the U.S. ban on H2O chip exports to China, less than the anticipated $5.5 billion, due to repurposing of some chip components. Looking ahead, Nvidia forecast Q2 revenue of $45 billion, plus or minus 2%, slightly below projections of $45.66 billion, reflecting an $8 billion revenue impact from ongoing export controls.
Despite these challenges, Nvidia shares jumped over 5% in premarket trading, as investors welcomed the strong quarter and tempered concerns over the export ban’s impact.
Futures Rally on Tariff News and Earnings
U.S. stock futures climbed sharply Thursday morning, with the S&P 500 futures up 1.6%, Nasdaq 100 futures gaining 2%, and Dow futures rising 1.3%. The rally was sparked by the court’s rejection of most of Trump’s “reciprocal” tariffs and Nvidia’s robust earnings, which bolstered optimism about AI-driven growth.
Additional earnings reports scheduled for Thursday include Kohl’s Corp, Foot Locker, Hormel Foods before market open, and Marvell Technology and Dell after close. Economic data highlights the second GDP reading and weekly jobless claims, while Federal Reserve officials including Thomas Barkin, Austan Goolsbee, and Lorie Logan are expected to speak.
Elon Musk Steps Away from Trump Administration
Tesla CEO Elon Musk has officially left the Trump administration, ending his role leading the Department of Government Efficiency (DOGE), which focused on cutting wasteful federal spending. This move came shortly after Musk criticized a White House-backed tax cut bill, calling it too costly and potentially undermining efforts to improve government efficiency.
Though Musk’s DOGE initiative promised to slash at least $2 trillion in federal spending, the agency claims to have saved only $175 billion so far—a figure that remains contested.
Oil Prices Climb on Positive Sentiment
Oil markets responded positively on Thursday, with Brent crude futures rising 1.5% to $65.29 per barrel and U.S. West Texas Intermediate climbing 1.7% to $62.88 per barrel. The court ruling against the tariff plan eased investor concerns, as Trump’s trade measures had been a major source of uncertainty for oil demand this year.
However, the decision also introduced further unpredictability since the White House plans to appeal. Supporting bullish sentiment, data from the American Petroleum Institute showed a significant 4.24 million barrel drawdown in U.S. oil inventories last week, defying forecasts for a 1 million barrel increase.
Traders will await official government inventory data to confirm the trend, hoping it signals continued strong fuel demand amid economic challenges.