U.S. Stock Markets Rise Following Court Ruling on Tariffs

The S&P 500 Index ($SPX) is up +0.46%, the Dow Jones Industrials Index ($DOWI) has increased by +0.07%, and the Nasdaq 100 Index ($IUXX) is up +0.58%. June E-mini S&P futures (ESM25) rose by +0.51%, while June E-mini Nasdaq futures (NQM25) gained +0.63%.

Today, stock indexes are advancing, with the S&P 500 reaching a one-week high and the Nasdaq 100 hitting a three-month high. Gains followed a court ruling that blocked certain tariffs imposed by President Trump. Additionally, stocks in AI and chip sectors are climbing, particularly after Nvidia reported strong earnings and its CEO forecast significant growth for the AI market. Gains in the Dow Jones are limited as Salesforce fell over -6% after receiving a downgrade from RBC Capital Markets.

Legal Ruling and Economic Data Support Markets

The market found support after the U.S. Court of International Trade ruled unanimously that President Trump improperly invoked an emergency ruling for his tariffs on global goods. This ruling applies to the 10% flat tariff, elevated rates on China, and specific tariffs related to fentanyl on China, Canada, and Mexico. Other tariffs, such as those under Section 232 and Section 301, remain unaffected. The court has given the administration 10 days to comply with the ruling.

Stocks retained their gains as U.S. economic data led to lower T-note yields. The Q1 core PCE price index was revised downward, weekly jobless claims rose more than expected, and April pending home sales showed their largest drop in over 2.5 years, all of which are dovish indicators for Federal Reserve policy. The 10-year T-note yield decreased by -3 basis points to 4.45%.

Initial unemployment claims rose by +14,000 to 340,000, signaling a weaker labor market than the forecast of 230,000. Continuing claims unexpectedly increased by +22,000 to a three-and-a-half-year high of 1.919 million, against a predicted decline to 1.893 million.

Additionally, Q1 GDP was revised up to -0.2% (quarter over quarter annualized) from -0.3%. The core PCE price index was revised lower to 3.4% from 3.5%.

Pending Home Sales and Rate Cut Expectations

Pending home sales fell -6.3% month over month, which was worse than the anticipated -1.0% and marks the largest decline in over 2.5 years. Market expectations are currently calculating a 2% chance of a -25 basis point rate cut at the upcoming FOMC meeting on June 17-18.

Upcoming market focus this week includes potential tariff news and signs of new trade deals. Scheduled for Friday, April personal spending is anticipated to rise +0.2% month over month, while personal income is expected to increase by +0.3% month over month. The core PCE price index, the Fed’s preferred inflation measure, is projected to rise +0.1% month over month and +2.5% year over year. Furthermore, the University of Michigan May consumer sentiment index is set to be revised upward by +0.2 points to 51.0, up from 50.8.

As the Q1 earnings season concludes, over 90% of S&P 500 companies have reported results, with 77% exceeding estimates, the highest percentage since Q2 2024. Q1 earnings growth stands at +13.1%, compared to the +6.6% predicted before the season began. Projections for full-year 2025 corporate profits in the S&P 500 are now expected to rise +9.4%, down from an earlier forecast of +12.5% in January.

Global Markets Mixed, Interest Rates Shift

International markets displayed mixed results; the Euro Stoxx 50 decreased by -0.17%, China’s Shanghai Composite rose by +0.70%, and Japan’s Nikkei 225 gained +1.88% to hit a two-week high.

In interest rates, June 10-year T-notes (ZNM25) are up +7 ticks, while the T-note yield fell -2.8 basis points to 4.450%. T-notes rebounded from early losses due to the downward revision of the core PCE index and higher jobless claims, both dovish factors for Fed policy. Easing inflation expectations are also supportive for T-notes.

European government bond yields are declining, with the 10-year German bund down -2.9 basis points to 2.525% and the 10-year UK gilt yield down -5.1 basis points to 4.676%. Expectations are solidifying for a -25 basis point rate cut by the ECB at the June 5 policy meeting.

U.S. Stock Movers

Semiconductor stocks are performing well, led by Nvidia (NVDA), which surged +5% after reporting Q1 revenue of $44.06 billion, exceeding the consensus of $43.29 billion. Other semiconductor companies such as Advanced Micro Devices (AMD), ON Semiconductor (ON), ASML Holding NV (ASML), Microchip Technology (MCHP), GlobalFoundries (GFS), and Qualcomm (QCOM) are all up more than +1%.

Nordson (NDSN) shares surged over +8% after reporting Q2 sales of $682.9 million, which beat the consensus of $674.8 million, and projecting Q3 sales between $710 million and $750 million.

Elf Beauty (ELF) increased over +25% after reporting Q4 net sales of $332.6 million, ahead of the expected $327.4 million, and acquiring Hailey Bieber’s Rhode beauty brand for $800 million.

Veeva Systems (VEEV) rose over +18% after reporting Q1 revenue of $759.0 million, above the consensus of $728.1 million, and raising its 2026 revenue forecast significantly.

Further, Agilent (A) gained over +3% after reporting Q2 net revenue of $1.67 billion and adjusting its full-year revenue forecast upward. Boeing (BA) also saw gains of over +3% following its announcement to ramp up 737 jetliner production.

Southwest Airlines (LUV) shares increased by over +3% after Deutsche Bank upgraded the stock to “buy” with a target price of $40.

In contrast, Best Buy (BBY) experienced a drop of more than -9% after reducing its 2026 adjusted EPS estimate. Salesforce Inc (CRM) fell over -6% after a downgrade to “sector perform” from “outperform.” HP Inc (HPQ) declined over -4% following disappointing Q2 adjusted EPS results and a cut to its full-year EPS forecast.

SentinelOne (S) dropped over -9% after lowering its 2026 revenue forecast below consensus. GE Vernova (GEV) decreased over -3% after Jeffries downgraded the stock to “hold.” Hormel Foods (HRL) reported Q2 net sales below expectations, causing a slight decline of over -1%.

Upcoming Earnings Reports

Scheduled earnings reports for May 29, 2025, include Bath & Body Works Inc (BBWI), Best Buy Co Inc (BBY), Burlington Stores Inc (BURL), Cooper Cos Inc/The (COO), Costco Wholesale Corp (COST), Dell Technologies Inc (DELL), Elastic NV (ESTC), Gap Inc/The (GAP), Hormel Foods Corp (HRL), Kohl’s Corp (KSS), Marvell Technology Inc (MRVL), NetApp Inc (NTAP), Roivant Sciences Ltd (ROIV), UiPath Inc (PATH), Ulta Beauty Inc (ULTA), and Zscaler Inc (ZS).

On the date of publication, Rich Asplund did not hold positions in any of the securities mentioned. All information in this article is for informational purposes only. For further details, refer to the Barchart Disclosure Policy here.

The views expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.