US court blocks Trump`s tariffs

General market commentary

Global equity markets fell on Wednesday, with U.S. equities closing broadly lower as investors awaited NVIDIA’s highly anticipated earnings report. With little economic data on the calendar, focus turned to the Fed’s May meeting minutes, which revealed policymakers are concerned about balancing inflation risks and employment. All 11 sectors of the S&P 500 ended in the red, though growth-oriented sectors like technology and communication services outperformed value sectors such as utilities and energy. U.S. Treasury yields rose, with the 10-year yield hitting 4.48%, while the dollar rebounded after a court blocked President Trump from unilaterally imposing tariffs, a move that briefly lifted confidence in U.S. trade prospects.

European markets followed suit, with the STOXX 600 and FTSE 100 slipping after two days of gains, previously supported by Trump’s decision to delay steep EU tariffs. Market sentiment remained cautious amid uncertainty over inflation, monetary policy, and geopolitical developments. In after-hours U.S. trading, NVIDIA reported earnings ahead of expectations, though its revenue outlook slightly missed forecasts due to tighter export curbs on AI chips. Nonetheless, hares rose 4.9% in extended trading. Investors are now turning to Friday’s PCE inflation data, with markets still pricing in two Fed rate cuts for 2025, expecting tariff-related price pressures to be short-lived.

Latest market and economic update

Most Asian equities rose today, buoyed by a U.S. court ruling blocking President Trump’s proposed tariffs and strong earnings from Nvidia, which lifted tech sentiment across the region. South Korea's KOSPI led gains following a surprise rate cut and upbeat performance from chipmakers, while broader Asian markets tracked a rally in U.S. futures.

US equity futures surged overnight following Nvidia’s better-than-expected quarterly results, with Dow, S&P 500, and Nasdaq 100 futures all rising more than 1%. Despite Wednesday’s market declines amid renewed trade tensions, Nvidia’s strong earnings and robust AI demand are expected to boost investor sentiment at the open.

European shares closed lower as investors trimmed riskier assets ahead of Nvidia’s earnings amid tariff concerns. The STOXX 50 fell 0.7% and the STOXX 600 dropped 0.6%, with tech firms like SAP, ASML, and Infineon down around 1%, banks falling sharply, while German automakers BMW, Volkswagen, and Mercedes-Benz rose over 2%, and UniCredit gained 1% after boosting its stake in Greek Alpha Bank.

The US dollar extended its advance on Thursday, driven by a court ruling that blocked President Trump’s reciprocal tariffs, with the dollar index climbing above 100 for the first time in a week. The euro slipped to 1.1245 against the dollar, as investors responded to the decision and the Fed’s cautious, wait-and-see approach in the latest FOMC minutes.

Oil prices rose in Asia this morning, supported by a US court ruling blocking President Trump’s planned tariffs and an unexpected drawdown in US oil inventories, which boosted hopes of tighter supply. However, despite recent gains, oil remains under pressure this year amid concerns over weak demand and slowing global economic growth.

A US federal trade court blocked President Trump from imposing broad tariffs under emergency powers on Wednesday, ruling that he had exceeded his authority and made trade policy overly dependent on personal discretion. The court gave the administration 10 days to comply with the order, though the White House is expected to appeal the decision.

The May FOMC minutes highlighted growing uncertainty over tariff increases and their economic impact, with officials noting these were larger and more extensive than expected. Policymakers agreed the Fed would remain patient and cautious, given solid growth and a moderately restrictive stance, while awaiting clearer signals on inflation and the economy.

Equities on the move

The following companies experienced moves in their share price driven by analyst ratings, quarterly earnings, or other news:

Nvidia beat quarterly sales expectations thanks to strong demand for its AI chips ahead of new US export restrictions to China but forecast a second-quarter revenue shortfall of $8 billion due to these curbs. Despite challenges, Nvidia remains optimistic about growth opportunities in other regions and the AI market, although ongoing trade tensions pose risks to future chip demand.

Salesforce raised its fiscal 2026 revenue and adjusted profit forecasts, driven by strong cloud spending and growth in its AI agent platform, Agentforce, which has already closed over 8,000 deals. The company also announced an $8 billion acquisition of Informatica to boost its data capabilities, though analysts expressed concerns about slowing organic growth and reliance on M&A.

Elon Musk left the Trump administration on Wednesday after criticising a tax cut bill, amid controversy over his spending cuts and concerns about their impact on his companies. Meanwhile, Tesla is set to begin trialling its robotaxi service in Austin on 12th June, marking a shift in focus as the company faces falling sales and growing competition in the electric vehicle market.

Abercrombie & Fitch raised its annual sales forecast after strong first-quarter results driven by demand for new styles, particularly at Hollister. Despite this momentum, the company lowered its profit outlook due to tariff-related pressures, while reaffirming its store expansion plans and announcing a $400 million share repurchase.

Macy’s cut its annual profit forecast amid tariff-related uncertainty and rising costs, signalling early discounts and selective price increases to manage supply chain challenges. Despite beating first-quarter estimates and showing improved performance at remodelled stores and high-end brands, the company still faces tough competition and inconsistent sales.

HP Inc lowered its full-year profit forecast due to expected slower PC market growth and higher tariff-related costs, causing its shares to fall over 7% in after-hours trading. Despite a 7% rise in Personal Systems sales in Q2, the company missed earnings estimates and warned of continued tariff impacts, though it is shifting production away from China to mitigate costs.

UniCredit plans to increase its stake in Greece’s Alpha Services to around 20% by acquiring nearly 10% more through financial instruments, pending regulatory approval. The bank secured these financial contracts at a discount, and the transaction is expected to generate an additional annual net profit of about €180 million. UniCredit aims to return these profits to shareholders while the deal is anticipated to have a moderate impact on its CET1 ratio.

Airbus warned that delivery delays will extend for another three years due to ongoing supply chain issues, particularly involving engines and structural components, despite some recent progress. At a customer meeting in Toulouse, the company acknowledged continued bottlenecks, with delays now affecting aircraft scheduled for 2027 and 2028, communicated sporadically to airlines.

Rio Tinto’s CEO Jakob Stausholm parted ways with the company amid board frustrations over his resistance to cost-cutting despite support for his strategic focus on lithium and copper. Stausholm’s departure follows concerns over rising overheads and rejected merger talks, with internal candidates now being considered to succeed him.

William Blair initiated coverage on BWX Technologies, Centrus Energy, and Oklo with Outperform ratings, citing strong positions in the nuclear sector and a favourable policy backdrop. The broker sees notable upside for all three, with BWXT and Centrus benefitting from strategic roles in supply and enrichment, and Oklo set for rapid SMR deployment through its integrated model.

Tempus AI faced doubts over its AI credibility and leadership, with Spruce Point Management questioning its limited AI-generated revenue and raising concerns about the track record of founder Eric Lefkofsky and several board members involved in past ventures that ended poorly for investors. The short seller also warned of a potential 60% downside, arguing that the company trades at an irrational premium compared to its peers.

BNP Paribas has initiated coverage on Adidas with an “outperform” rating and a €290 price target, citing medium-term revenue growth and margin improvement. The analysts see upside from brand momentum, new products, and normalising U.S. conditions, but caution that tariff risks and overambitious margin targets could pose challenges.

L’Oréal shares fell after JPMorgan placed the equity on negative catalyst watch, citing concerns over slowing sales growth and an elevated valuation. The bank expects weaker performance in key markets like Western Europe, the U.S., and China, and warns that the company’s valuation premium over peers may come under pressure.

Citi Research downgraded E.ON SE to “neutral” from “buy” and removed it from its European Focus List, citing limited near-term upside after a 46% year-to-date rise. While the company’s structural growth outlook remains intact, Citi believes the current valuation already reflects expected regulatory benefits and sees the equity trading near the upper end of its historical range.

Moody’s affirmed Goodyear’s credit ratings and upgraded its liquidity rating, revising the outlook to stable due to improved margins and reduced leverage under its Goodyear Forward plan. Free cash flow is expected to turn positive in 2026, with potential upgrades if margins improve or downgrades if financial metrics weaken.

Upcoming data and events

Key economic data today include GDP, initial jobless claims, pending home sales, and crude oil inventories in the US. Earnings season continues with major reports expected from Marvell Technology Group, Dell, and Ulta Beauty after the market closes.

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