Rally in US dollar, stocks, fizzles as investors digest tariff blocks
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The news: An early market rally in response to a US court ruling that blocked President Trump’s trade tariffs lost steam on Thursday, with the US dollar falling against safe haven currencies and stocks paring gains.
The numbers: S&P futures were up 0.8%, having gained as much as 1.8% earlier on Thursday, while Nasdaq futures climbed 1.3%, having benefited from Nvidia’s strong earnings.
Europe’s Stoxx 600 was up 0.1% by 2:30pm BST, having risen 0.5% earlier, while the UK’s FTSE 100 index remained flat during trading.
The US dollar had gained almost 1% against the Japanese yen earlier on Thursday, but was last down 0.2%. The US dollar was also down 0.2% against the safe haven currency Swiss franc after an earlier rally.
The context: A US trade court blocked most of Trump’s tariffs from going into effect on Wednesday, ruling that the President had overstepped his authority. White House economic adviser Kevin Hassett dismissed the tariff ruling, stating on Thursday that the decision was the work of “activist judges” and that he was confident the administration would win on appeal.
Separately on Thursday, the US Department of Labor also released data showing that weekly jobless claims rose more than expected, with initial claims for state unemployment benefits rising 14,000 to a seasonally adjusted 240,000 for the week ended 24 May.
