NEW YORK (AP) — A considerable surge in stocks that initiated in Asia on Thursday tapered off after reaching Europe and the US, amidst ambiguity regarding future developments. US courts have blocked many of President Donald Trump’s Broad Tax Initiatives.
The S&P 500 increased by 0.4% after surrendering more than half of its initial gain. The Dow Jones Industrial Average gained 117 points (0.3%), while the Nasdaq Composite also moved up by 0.4%.
This slowdown followed the market’s first response to the ruling made by the US International Trade Court late Wednesday, subsequent to an initial surge of nearly 2% in Tokyo and Seoul. The court cited the 1977 International Emergency Economic Powers Act referenced by Trump in a broad order. Increased taxes on imports globally were not permitted by customs duties.
The ruling initially sparked optimism in financial markets that a potentially weakened Trump might avoid leading the economy into a recession due to his tariffs. Trump expressed his desire to bring manufacturing jobs back to the US and cautioned that this process could inflict some degree of hardship on households.
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While tariffs remain in effect as the White House appeals the ruling, the ultimate resolution is still uncertain. The court’s ruling impacts only certain tariffs imposed by Trump. It does not pertain to foreign steel, aluminum, or automobiles, which were invoked under different legislation.
“Trump can impose significant and extensive tariffs in the long run through alternative means,” stated Ulrike Hoffmann-Burchardi, chief investment officer for global equities at UBS Global Wealth Management.
This uncertainty has detracted from the enthusiasm in financial markets as they transition through Europe and to the US. Nevertheless, movements from US courts were perceived as favorable for financial markets.
Brian Jacobsen, chief economist at Annexwells Management, remarked:
“The market has priced this as a more favorable kind of uncertainty compared to the announcement date,” which Trump branded as his global tariffs announcement on April 2.
The S&P 500 is now within 3.8% of its all-time high after a drop of approximately 20% or less at certain points last month.
Technology stocks led the way on Wall Street, as Nvidia surpassed analyst expectations for the recent quarterly profits and revenues.
The chipmaker has become one of the largest and most influential stocks in the US market due to a surge in interest around artificial intelligence technology, increasing by 3.2%, and contributing significantly to the S&P 500’s rise.
AI application software firm C3.AI surged 20.8% after analysts reported better-than-expected profits for the latest quarter. They also disclosed that the US Air Force has raised its contract cap from $350 million to $450 million. The company reported $108.7 million for the previous quarter.
Elf Beauty also shone brightly, gaining 23.6% after releasing stronger-than-expected profits in recent quarters. They have also decided to acquire the Haley Bieber Road Skincare Brand for a billion-dollar deal. The company raked in $212 million in net sales during the 12 months ending in March.
Bieber, a model and wife of singer Justin Bieber, serves as the Chief Creative Officer at Lords, as well as Head of Innovation and Strategic Advisor for the conglomerate.
These gains helped offset declines at Best Buy, which fell 7.3% despite reporting stronger-than-expected profits. However, its revenue missed analyst forecasts. The electronics retailer also reduced its annual revenue and profit outlook, predicting “customers may remain at the previous levels for the remainder of the year with no significant changes in consumer behavior based on recent trends.”
Numerous companies have indicated that the uncertainty stemming from tariffs has made providing financial forecasts for the next year quite challenging.
The S&P 500 climbed 23.62 points to 5,912.17. The Dow Jones Industrial Average rose to 42,215.73 by 117.03, while the Nasdaq Composite gained 19,175.87 with an increase of 74.93.
In the bond market, Treasury yields decreased following several complex economic reports. Some indicated the US economy may have contracted in the first three months of the year more than previously estimated. Others noted that more US workers applied for unemployment benefits than economists anticipated last week.
The Treasury yield fell to 4.43% from 4.47% during the latter half of Wednesday.
In overseas stock markets, Japan’s Nikkei 225 rose by 1.9%, leading the Asian market, with gains of 1.4% in Hong Kong and 0.7% in Shanghai. The Korean Kospi climbed 1.9% following a rate cut by the Bank of Korea aimed at alleviating economic pressures.
European stock movements have been considerably more subdued. Both France’s CAC 40 and Germany’s DAX shifted from initial gains to modest losses.
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AP business writers Matt Ott and Elaine Kurtenbach contributed.
Source: apnews.com