Jamie McGeever
8 min read
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By Jamie McGeever
ORLANDO, Florida (Reuters) - TRADING DAY
Making sense of the forces driving global markets
By Jamie McGeever, Markets Columnist
Tariff ruling and counter-ruling
Tariff confusion reigned on Thursday as investors digested a U.S. trade court ruling late Wednesday against most of President Donald Trump's tariffs. They initially cheered the news, but by the time a U.S. appeals court reinstated the duties just before the Wall Street close, that optimism had largely evaporated.
In my column today I look at how structurally higher U.S. borrowing costs in the coming years mean the fiscal 'precipice' Washington faces may be even nearer than it seems. More on that below, but first, a roundup of the main market moves.
If you have more time to read, here are a few articles I recommend to help you make sense of what happened in markets today.
1. U.S. court's tariff ruling gives markets short-term pop,long-term angst 2. Trump's tariff tally: $34 billion and counting, globalcompanies say 3. Trump, Fed's Powell meet at White House, Fed says 4. Nvidia discloses more China risks, but CEO praises Trump 5. Germany's return as world's top creditor may befleeting: Mike Dolan
Today's Key Market Moves
* Wall Street's rally fades, and benchmark indices end upa maximum of 0.4%. Nvidia shares hit a 4-month high followingthe firm's results and outlook, up 3.2% on the day and 65% fromthe April 7 low. * In Asia, Japan's benchmark Nikkei 225 index rises nearly2%, its best day in over a month, and Chinese tech stocks climb2.5%. * U.S. Treasury yields fall as much as 5 bps across thecurve, with a 7-year note auction registering strong demand. * Japan's 40-year bond yield slides 21 bps to 3.10%, itslowest in over a month and sharply down from last week's recordhigh 3.675%. * Gold snaps a three-day losing streak, rising nearly 1%to $3,315/oz.
Courting confusion
As if the fog of uncertainty shrouding markets wasn't thick enough, investors' visibility has been dimmed further by a U.S. court ruling that most of Trump's tariffs are unlawful, followed by an appeals court reinstating them while the appeal process unfolds.
The administration will likely find other legal avenues to implement its tariffs if need be, so the net effect may ultimately be minimal. But the ruling and appeal could affect Washington's negotiations with major trade partners, timelines, and how countries play their hand.
For investors, the upshot is more uncertainty and less clarity.
The latest twists come just as it looked like tariff revenues were beginning to pick up. Donald Schneider at Piper Sandler on social media platform X this week estimated that tariff revenues were coming in at an annualized pace of $255 billion, up from a "norm" of about $85 billion, while analysts at UBS on Thursday said tariffs were on track to generate $300-450 billion in annual revenues. Wednesday's court ruling, however, would cut that to below $200 billion.
