Stock Market Today: Stocks Chop as Judges Block Then Reinstate Tariffs

A decision issued late Wednesday by one federal trade court appears to block many of President Donald Trump's tariffs, for now, and it provided more boost for equity futures already lifted by Nvidia's (NVDA) spectacular-enough fiscal 2026 first-quarter earnings and commentary.

Momentum ebbed into the opening bell Thursday despite a positive surprise on economic growth, though all three main equity indexes did gap up to start the regular trading day.

A second federal court decision issued Thursday afternoon also appears to block Trump's tariffs, though a late-day ruling seems to temporarily pause the earlier decisions.

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Investors, traders and speculators are left to wonder what will President Trump do in response to this judicial setback, apart from the Department of Justice appealing the decision to block the tariffs, as policy uncertainty remains the market's primary concern.

A three-judge panel of the nine-member U.S. Court for International Trade struck down levies on imports from China, Canada, Mexico and other countries imposed by the Trump administration on February 1 under a 1977 law, the International Economic Emergency Powers Act (IEEPA).

And, later, U.S. District Judge Rudolph Contreras ruled President Trump lacks the unilateral authority to impose tariffs by declaring emergencies over trade deficits and fentanyl.

Late Thursday, a federal appeals court granted the Trump administration's request to temporarily pause the earlier rulings and allow tariffs to remain in place for the time being.

Meanwhile, according to a statement released by the Federal Reserve, Fed Chair Jerome Powell visited the White House today at the invitation of President Trump "to discuss economic developments including for growth, employment, and inflation."

The Fed said Powell did not share with Trump "his expectations for monetary policy, except to stress that the path of policy will depend entirely on incoming economic information and what that means for the outlook."

Today's incoming economic information was generally positive, including an upside surprise from the Bureau of Economic Analysis on its second look at first-quarter GDP – from a 0.3% annualized decline in the first estimate to a 0.2% annualized decline.

The Labor Department reported initial jobless claims for the week ending May 24 of 240,000, an increase of 14,000 from the previous week's 226,000, which was revised down from 227,000.

This week's economic calendar closes on a major note Friday at 8:30 am ET with the BEA's release of the Fed's preferred inflation measure, the Personal Consumption Expenditures Price Index (PCE).

By the closing bell, the Dow Jones Industrial Average held a 0.3% gain at 42,215, the S&P 500 was up 0.4% to 5,912, and the Nasdaq Composite had risen 0.4% to 19,175.

May tariffs please the court

The ruling by the Court of International Trade had given the Trump administration up to 10 calendar days to end tariff collection. According to Reuters, "The administration immediately asked an appeals court to stay Wednesday's trade court ruling and allow the tariff regime to remain in place."

Indeed, Trump's petition was granted on Thursday.

Plaintiffs in the original suit – states led by Democratic governors as well as small businesses alleging damages due to the tariffs – will likely pursue their procedural options to the fullest extent.

And, yet, the president has recourse right now. "We think the President likely can use other legal authorities to achieve the same outcome," writes Barclays analyst Michael McLean, "which suggests this may only be a bump in the road."

McLean cites multiple federal laws – including Section 338 of the Tariff Act of 1930, Section 122 of the Trade Act of 1974, Section 232 of the Trade Expansion Act of 1962 and Section 301 of the Trade Act of 1974 – that President Trump can use to further his trade policy goal.

"President Trump faces new restrictions on his trade powers coming from the U.S. judicial branch," observes BCA Research Chief Geopolitical Strategist Matt Gertken, "but they will not prevent him from continuing to restrict trade and investment with China. Rather, they will establish some curbs against entirely arbitrary executive tariffs, especially when wielded against U.S. allies and partners."

A spokesperson for the White House said the Trump administration remains "committed to using every lever of executive power to address this crisis and restore American Greatness."

Nvidia provides needs and wants

"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," said CEO Jensen Huang during the company's fiscal 2026 first-quarter conference call.

Indeed, earnings and guidance together support Huang's big vision, and NVDA stock was up as much as 6.4% the day after its latest quarterly update and closed with a gain of 3.3%.

"NVDA executed well despite the loss of H20 representing a greater headwind than we (or investors) had anticipated," writes Wedbush analyst Matt Bryson.

Bryson notes that gross margins and revenue are "expected to trend positively" during the second quarter of the calendar year, "despite the China headwind" and cites "seemingly more certain demand growth" through calendar year 2026, driven by an increase in sovereign AI projects.

"We see no reason to shift our constructive opinion on NVDA," the analyst concludes. Bryson reiterates his Outperform (or "Buy") rating and his $175 12-month price target.

Salesforce suffers for its strategy

Salesforce (CRM) was down as much as 7.8% and ended the session lower by 3.3% even though the cloud software company beat fiscal 2026 first-quarter revenue and earnings estimates, shared solid second-quarter guidance and boosted its full-year outlook.

The AI stock shed almost $9 billion in market capitalization after RBC Capital Markets analyst Rishi Jaluria cut his rating and his 12-month price target.

"Stepping back, while we like the margin expansion story at Salesforce and the valuation is undemanding," Jaluria writes, "deal risk with Informatica has tipped the scales for us."

On Tuesday, The Wall Street Journal and the companies confirmed that Salesforce is acquiring Informatica for $8 billion.

Jaluria downgraded CRM to Sector Perform (or "Hold") from Outperform (or "Buy") and now sees the shares at $275 a year from now vs $420. The analyst cites integration challenges and a potential drag on CRM's growth trajectory.

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