On Thursday, the majority of US President Donald Trump’s global tariff measures were ruled illegal and blocked by the US trade court, boosting US assets. Nvidia Corp.’s optimistic earnings report also lifted investor sentiment.
The Trump administration will appeal the ruling. After the ruling was announced, the S&P 500 and Nasdaq 100 index futures rose by 1.6% and 2% respectively. Asian stocks rose by 0.7%, with Japanese and South Korean stocks climbing by 1.7%. The yen weakened and the dollar strengthened, with the dollar index rising to its highest level in more than a week. The yield on the 10-year US Treasury bond rose by 2 basis points.
Nvidia’s share price soared nearly 5% in after-hours trading in New York after the chipmaker released a solid revenue forecast.
Although investors hope to have a clearer understanding of the impact of the court ruling, the ruling has temporarily eased the full-scale sell-off shock that the global financial market suffered due to Trump’s announcement on April 2 to impose tariffs. The century-high tariffs and the president’s tax cut plan have panicked investors, who have started to conduct “sell the US” transactions due to concerns that the trade war will harm global economic growth.
Timothy Moe, chief Asia-Pacific equity strategist at Goldman Sachs, said in an interview with Bloomberg Television: “This might be seen as a heavy blow, but it’s not the final outcome. Specifically, the Trump administration can still take many other alternative measures to maintain tariffs.”
“More details are needed,” said Rodrigo Catril, a strategist at National Australia Bank in Sydney. “Especially whether there is a ban or if it will go to an appeal process, and whether the tariffs remain in place for now. The best guess at this stage is that the government has enough power to bypass the ruling and impose tariffs on multiple grounds.”
Mingze Wu, a currency trader at StoneX Financial Pte in Singapore, said: “The dollar was sold off heavily due to tariffs, so it’s reasonable to see the opposite now as the trade outlook has become somewhat more optimistic to a certain extent.”
Moreover, Nvidia’s CEO, Jensen Huang, issued a solid sales forecast, easing investors’ concerns over the slowdown of the Chinese economy, and stated that the market for AI computing will still experience “exponential growth”.
Despite Nvidia’s boost to optimism, Hewlett-Packard fell about 8% in after-hours trading as the company’s profit outlook fell short of expectations and it lowered its annual earnings forecast, indicating the ongoing costs of economic weakness and U.S. tariffs on Chinese goods.
It was reported that the Trump administration would take measures to restrict the sale of chip design software to China, which led to a sharp drop in the share prices of Cadence Design Systems Inc. and Synopsys Inc. Meanwhile, it was announced that Tesla would launch an autonomous taxi service in Austin on June 12.
Nvidia’s outlook lifted Asian chip stocks and suppliers, including Advantest Corp., SK Hynix Inc. and Foxconn Industrial. The gains in South Korea’s market pushed the local index to its highest level in nine months.
Chinese chip software stocks rose sharply after the Trump administration asked some US semiconductor design application manufacturers to stop shipping to China. People familiar with the matter said the Bureau of Industry and Security of the US Department of Commerce sent letters to at least some leading electronic design automation (EDA) product suppliers on Friday, asking them to stop shipping to Chinese customers.
Technical analysis:
Gold: Affected by the news that Trump’s tariffs are unconstitutional, the gold price briefly dropped below 3250. Within the day, attention should be paid to the result of the second test of the 3240/50 area. If the previous structural position can be held steady, one or two attempts at going long can be made. Additionally, if the price can effectively break through the blue area, a signal of momentum breakthrough can also be attempted once. For detailed positions, please consult the plugin.
(Gold 15-minute chart)
The plugin is updated from 12:00 to 13:00 every trading day. If you want to experience the same plugin as shown in the chart, please contact V: Hana-fgfg and write “666” in the message.
Nasdaq: Yesterday, we took a short position after the liquidity refresh at 21,500, achieving a profit-to-loss ratio of around 3 times. Although Nvidia released strong financial reports after the market closed, today we will continue to observe whether a bearish signal emerges after the liquidity sweep. If it does, we will follow the recent strategy. For detailed positions, please consult the plugin.
(NASDAQ 15-minute chart)
The plugin is updated from 12:00 to 13:00 every trading day. If you want to experience the same plugin as shown in the chart, please contact V: Hana-fgfg and note “666” in the message.
Crude oil: The long positions we took after sweeping the liquidity in the yellow area previously performed nearly perfectly. For new positions today, you can choose the blue area in the plugin or wait for the next yellow area sweep to take long positions. For detailed positions, please consult the plugin.
(Crude Oil 15-Minute Chart)
The plugin is updated from 12:00 to 13:00 every trading day. If you want to experience the same plugin as shown in the picture, please contact V: Hana-fgfg and note “666” in the message.
Today’s key financial data and events to focus on:
20:30 U.S. Seasonally Adjusted Initial Jobless Claims (in thousands) (to May 24)
22:00 US April NAR Pending Home Sales Index (Seasonally Adjusted)
At 22:40, Charles L. Evans, President of the Federal Reserve Bank of Chicago, participates in a Q&A session.
