Stock Market Surges Following Powerful Nvidia Earnings Report and Court's Decision to Cancel Trump's Tariffs
Stocks surged higher Thursday morning, with the S&P 500, Nasdaq Composite, and Dow Jones Industrial Average gaining by 0.5%, 0.8%, and 0.1%, respectively. The advance was driven by a strong earnings report from Nvidia and a federal court decision that struck down most of the Trump administration's tariffs.
Nvidia, an AI investor favorite, reported its fiscal first-quarter revenue had jumped 69% compared to the year-ago period, reaching $44 billion. The tech giant's CEO, Jensen Huang, highlighted that demand remains incredibly strong and is likely to accelerate as AI adoption becomes mainstream. Nvidia shares jumped 5%, trading at their highest level in three months, and leading broader gains for mega-cap tech companies, as Tesla, Microsoft, Apple, Amazon, Alphabet, Meta Platforms, and Broadcom also advanced.
Trade policy developments were also closely monitored, as a federal court ruled that President Donald Trump had overstepped his authority by invoking the International Emergency Economic Powers Act to impose massive tariffs on leading U.S. trade partners. Uncertainty surrounding trade has roiled financial markets in recent months. However, shares of Best Buy and HP Inc. dropped as a result of the expected impact of tariffs on their businesses.
Goldman Sachs analysts suggested that the administration could reinstate tariffs if it wins on appeal or use different sections of the Trade Act to impose tariffs, such as Section 122 for up to 15% tariffs limited to 150 days, or broader use of Section 232 as previously applied to steel and aluminum.
In other news, Bitcoin was down from its all-time high of $112,000, and the yield on the 10-year Treasury note fell to 4.43%. The dollar index and gold futures were down 0.4% and 0.6%, respectively.
Meanwhile, HP Inc. posted worse-than-anticipated profit and lowered its full-year outlook due to the impact of tariffs. Shares of HP fell by 5%. In contrast, Nvidia shares rallied sharply after breaking out from a pennant and consolidating within a flag pattern above the 200-day moving average.
Futures pointed to a higher open for major U.S. stock indexes, though gains had moderated substantially over the past few hours.
- In the market cap realm, Bitcoin, despite dipping from its all-time high of $112,000, is still a focal point for investors, while the yield on the 10-year Treasury note dropped to 4.43%.
- As for the technology sector, Nvidia, a favorite among AI investors, reported a staggering 69% increase in its fiscal first-quarter revenue and witnessed its shares jumping 5%, reaching the highest level in three months.
- On the other hand, the impact of tariffs has been evident in sectors such as entertainment and lifestyle. For instance, HP Inc. posted poorer-than-expected profits and lowered its full-year outlook, causing shares to plummet by 5%.
- The ICO space is not far from the picture, as Goldman Sachs analysts speculate potential reinstatement of tariffs or alternative use of sections in the Trade Act, such as Section 122 or Section 232, to impose tariffs, similar to previous actions on steel and aluminum.
- In the realm of education-and-self-development, it would be intriguing to delve into the technical analysis behind Nvidia's stock surge, as the shares broke out from a pennant and consolidated within a flag pattern above the 200-day moving average.
