Wall Street Rallies as Tariff Ruling Sparks Risk-On Sentiment; Tech, AI, and Treasury Yields Take Center Stage
Nasdaq, S&P 500, Dow jump after Trump tariff blockade; Nvidia leads AI stocks, Treasury curve steepens
The U.S. equity markets are surging back toward all-time highs, driven by a rare judicial block on the Trump administration’s sweeping tariff authority and a bullish round of earnings led by NVIDIA (NASDAQ:NVDA). All three major indices — the S&P 500, Nasdaq 100, and Dow Jones Industrial Average — are registering strong gains, as futures markets ignite on renewed hopes of a softer trade landscape and resilient corporate performance.
Tariff Disruption Reshapes Market Risk: Court Ruling Sparks $14 Billion in Refund Risk
A federal trade court’s landmark ruling has declared former President Trump’s use of the International Emergency Economic Powers Act (IEEPA) to levy broad tariffs as unconstitutional, throwing $14 billion in collected tariffs into legal limbo. Nearly $8 billion of that stems from imports from China and Hong Kong. The decision has upended investor expectations, triggering a flight into risk assets as fears of long-term stagflation ease temporarily.
While the court’s decision removed immediate pressure from key U.S. trading partners, legal uncertainty lingers. Analysts warn the administration may simply reframe its tariff strategy under Section 232 or Section 301 authorities, prolonging business uncertainty and complicating global trade negotiations.
NVIDIA (NASDAQ:NVDA) Powers Nasdaq Higher on 69% Revenue Surge Despite China Setback
Semiconductor titan NVIDIA reported $44.1 billion in Q1 revenue — a blistering 69% year-over-year increase — pushing its shares up nearly 6% in premarket trading. Despite forecasting an $8 billion revenue hit due to export restrictions on its H20 AI chips bound for China, investors focused on the company’s domestic manufacturing pivot and bullish tone on U.S. AI infrastructure.
CEO Jensen Huang underscored plans to transition Nvidia’s entire AI chip production to American soil, with the help of TSMC, Foxconn, and Wistron. However, Huang issued a stark warning on over-regulating exports to China, describing the country as “a springboard for global AI success” and a critical market for U.S. competitiveness.
Other AI-exposed stocks followed suit. Marvell Technology (NASDAQ:MRVL) gained 5%, while C3.ai (NYSE:AI) soared 17% after posting better-than-expected earnings. Meanwhile, Tesla (NASDAQ:TSLA) advanced 3% following Elon Musk’s surprise resignation from his government role, signaling a renewed focus on corporate operations.
S&P 500 Soars 19% Since April 8 as “Buy-the-Dip” Sentiment Reigns
Since the April 8 bottom — when tariff threats reached their peak — the S&P 500 has climbed nearly 19%, the fastest recovery from a dip in over 30 years. Data from JPMorgan and VandaTrack confirmed over $50 billion in retail inflows since that trough, surpassing COVID-era highs. On April 3 alone, retail investors poured in a record $3 billion, reviving confidence in dip-buying strategies amid geopolitical and fiscal volatility.
Salesforce (NYSE:CRM) Defies Economic Headwinds, Lifts Guidance With $8B Informatica Deal
Salesforce shocked Wall Street by raising its full-year outlook despite the macro uncertainty. CEO Marc Benioff credited strong bookings and currency tailwinds, while announcing the $8 billion acquisition of Informatica (NYSE:INFA). While the deal is seen as a major AI-enhancing move, some analysts warned it may risk losing Informatica’s “neutral Switzerland” status with key cloud players like Amazon (NASDAQ:AMZN) and Oracle (NYSE:ORCL).
U.S. Treasury Market Responds: Yields Surge as Risk Appetite Returns
The benchmark 10-year Treasury yield (4.50%) climbed on the back of revived risk appetite, while the 2-year (4.01%) and 30-year (4.99%) also advanced. Analysts cited unwinding of tariff-related hedges and upcoming jobless claims and GDP revisions as catalysts. Rising yields may pressure equity valuations, though they are currently seen as confirmation of improving sentiment.
Dollar Seesaws After Initial Surge: DXY Nears 100 Before Retracing
The U.S. Dollar Index (DXY) briefly surged toward 100.0 on the tariff ruling before paring gains. The euro touched $1.112 before recovering back to $1.1285, and the USD/JPY spiked past 146 before retreating. FX strategists warn of more volatility as markets recalibrate post-ruling expectations and monitor the Supreme Court appeal.
UK, EU Watch Nervously as Trade Negotiations With Trump Enter Critical Phase
The UK and EU are scrambling to secure concessions from Washington. The UK, still vulnerable to 10% reciprocal tariffs on exports, is pushing for expedited trade terms post-ruling. EU negotiators face even higher stakes: Trump has floated 50% tariffs on all EU exports. With only 90 days before retaliatory measures resume, the next round of OECD meetings in Paris could be pivotal.
Investor Sentiment Mixed: Bullishness Drops Despite Market Surge
Even as equities rally, bullish sentiment among retail investors has dipped. The latest AAII survey shows only 32.9% expect higher markets in six months — a drop from prior highs — suggesting skepticism over the durability of the rally amid legal uncertainty and softening global growth.
Verdict: S&P 500 and Nasdaq Outlook Remains Bullish, but Tariff Uncertainty Caps Upside
Despite geopolitical crosswinds, earnings beats from NVDA, CRM, and AI have reignited tech momentum. The Nasdaq 100 (NQ00) surged 1.25%, while the E-mini S&P 500 (ES00) rose 0.82% to $5951.25. Given the favorable earnings cycle and resilient retail inflows, momentum remains bullish. However, legal volatility around tariffs and rising bond yields could cap further upside.
Rating: BUY on Nasdaq and AI-focused tech leaders. HOLD on S&P 500 and Dow amid tariff uncertainty. SELL long-dated Treasuries unless yield curve steepens further.
