U.S. stock futures rallied sharply late Wednesday, buoyed by a federal court’s decision to strike down President Donald Trump’s so-called reciprocal tariffs. The positive momentum further intensified following robust quarterly results from artificial intelligence giant Nvidia, which reinforced market optimism.
S&P 500 futures climbed 1.66%, while Dow Jones Industrial Average futures increased 533 points or 1.27% and the Nasdaq 100 futures jumped 2.11%, fueled by strong Nvidia’s earnings.
On Wednesday, a U.S. federal court ruled that President Donald Trump overstepped his executive powers with the imposition of reciprocal tariffs, striking at a central pillar of his economic policy agenda.
In their decision, the judges determined that the 1977 International Emergency Economic Powers Act (IEEPA)—the statute cited by Trump as legal grounds for his tariffs—does not authorize the president to impose such broad import duties, as enacted last month.
The panel stated that the scope and retaliatory nature of the tariff orders surpass the authority Congress delegated to the President under IEEPA to regulate imports through tariffs. The court further noted that the so-called Trafficking Tariffs do not address the specific threats the presidential orders cited as justification, which undermines their legal basis.
The case originated from a lawsuit representing five American firms that depend partially on imported goods. However, the judges clarified that Trump’s tariff directives are unlawful in their entirety, extending the ruling beyond just the affected businesses.
As a result, the court issued a sweeping remedy, ordering that the tariffs in question be vacated and permanently barred from enforcement.
Meanwhile, Nvidia once again eclipsed Wall Street expectations in the first quarter of 2025, reporting earnings per share (EPS) of $0.96, ahead of analysts’ consensus of $0.93. The company’s revenue also surged past forecasts, reaching $44.1 billion compared to the anticipated $43.29 billion.
However, the chipmaker’s robust sales figures were offset by weaker-than-expected profitability. Adjusted gross margin rose to 61%, which fell short of market predictions for a 71% increase. Similarly, earnings before interest and taxes (EBIT) stood at $21.64 billion, significantly below the $26.97 billion estimate.
While Nvidia’s headline numbers underscored its dominance in the semiconductor sector, the softer margins and EBIT highlight ongoing cost pressures and the market’s high expectations for performance going forward.
