Global stock markets rose after US courts blocked most of the tariffs imposed under President Donald Trump’s control.
On Wednesday, three judges at the International Trade Court in New York said the emergency laws called by the White House could not launch protectionist policies on dozens of countries to bypass the US Congress.
“The global and retaliatory customs orders exceed the authorities granted to the president by the International Emergency Economic Force Act to regulate imports through tariffs,” he said.
As Morningstar Senior US economist Preston Caldwell saysAll product-specific tariff hikes continue following court decisions. The largest of these are 25% tariff hikes for automobiles, steel and aluminum.
“Overall, the US tariff rate will fall from about 18% to about 7% after the court’s decision, a significant increase from the 2.4% level in 2024, but a much milder shock for the economy than it was before,” he says.
“But we haven’t left the woods yet. The Trump administration may continue to roll out large tariff hikes on certain products.”
The Stoxx Europe 600 index was originally led high by Dutch semiconductor supplier ASML ASML and Stellantis, the automaker Stramwas hit badly by the tariff disruption. Early profits declined as the day progressed, and the index fell slightly lower on the day.
The US market was high on Thursday, with the S&P 500 rising nearly 0.50%, and the high-tech NASDAQ compound index rising about 1%.
The euro and pound were won against the US dollar, but the German 10-year band softened to 2.52% below 4 basis points from Wednesday’s level.
Stocks of artificial intelligence giant Nvidia NVDAconsidered a full-scale global tech sentiment, up over 5% after revenues showed another significant increase in sales.
Morning Star Analyst Increased company fair value estimates From $125 to $140 per share, export controls are claiming it is not slowing down the company.
Do European investors have tariff fatigue?
The more modest move in the European index on Thursday can be explained by market skepticism after weeks of stock and bond volatility. Investors have been paralyzed by tariff headlines, says Gilles Moëc, the chief economist of the AXA group, is succumbing to what he calls “fear fatigue.”
European stock markets plummeted on May 23 after President Trump threatened tariffs on EU goods, after the US president returned to the proposal and recovered on Monday, which appears to have postponed tariffs until July 9.
AJ Bell Investment Director Russ Mold says the market is not sure of what might otherwise be considered good news.
“The fact that profits were measured rather than a huge hit reflects a sound level of skepticism about whether this can really curb the Trump administration, which has already begun appeals to the verdict,” he says.
Anyway, certain European tariffs will continue anyway, add a note from ING’s economists.
“In Europe, the majority of tariffs affect it. Automotive sectorand this part just remains there,” says the company.
“If the US administration moves with intended tariffs or European drug allocations, the majority of European exports to the US will be subject to tariffs or more than 20%.”
Investors still expect more market volatility
The ruling cannot resolve the perceived threat of tariffs and the possibility of market volatility, particularly due to appeals already launched by the White House.
“This does not necessarily mean that tariffs will disappear anytime soon, as federal courts are likely to take a more favorable view,” said Lale Akoner, global market analyst at trading platform Etro.
“It signalled at the beginning of a long legal battle, and could ultimately reach the Supreme Court.
Other commentators agree that the ruling rarely relieves investors’ fears. For stocks, this means continuous uncertainty.
“Overnight news about the US Trade Court’s ruling rarely reduces uncertainty about the direction of the global economy, assuming the Trump administration challenges the decision and is looking for a new route to implement trade tariffs.”
“It is becoming increasingly clear that there will not be a steady endpoint in structure, size and tariff widths, and planning long-term decisions about supply chains and customer bases will become increasingly difficult.
“This clearly raises doubts whether the intended policy outcomes to reconcile US trading relationships can be achieved so far, but it also leaves the stock market within the scope between current solid profit margins and highly uncertain outlook.”
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