The US Court of Appeals has lifted some of Trump’s tariffs — trade uncertainty continues

At the end of Thursday, the Dow Jones Index (US30) rose by 0.28%. The S&P 500 (US500) added 0.40%. The Nasdaq (US100) closed higher at 0.21%. Market growth was held back by ongoing legal battles over President Donald Trump’s tariffs. A federal court initially blocked most of the tariffs, ruling that they were imposed illegally, but on Thursday afternoon, a US appeals court reinstated them, creating uncertainty about trade policy. Weak data reinforced expectations of multiple Fed rate cuts this year. In the first quarter of 2025, the US economy contracted by 0.2% on an annualized basis, which was slightly better than the initial estimate of a 0.3% decline, but still marked the first quarterly contraction in GDP in three years.

European stock markets were mostly lower on Thursday. The German DAX (DE40) fell by 0.44%, the French CAC 40 (FR40) closed down 0.11%, the Spanish IBEX35 (ES35) rose by 0.11%, and the British FTSE 100 (UK100) closed lower at 0.11%. Initial optimism following the US Court of International Trade’s ruling that President Donald Trump had exceeded his authority in imposing retaliatory tariffs and ordering the administration to stop collecting them faded as investors weighed the possibility that the administration would use alternative legal avenues to maintain its trade policy.

WTI crude oil prices fell to $60.7 per barrel on Thursday under pressure from weak US economic data and concerns about rising global supply. A report from the US showed that the economy contracted in early 2025, raising concerns about slowing fuel demand. At the same time, Kazakhstan said that OPEC+ is likely to increase production at its meeting on Saturday, although the size of the increase has not yet been determined. The head of the International Energy Agency said that oil consumption in China remains weak, exacerbating concerns about demand. On the supply side, US crude oil inventories unexpectedly fell by 2.8 million barrels last week.

Asian markets were mostly higher yesterday. Japan’s Nikkei 225 (JP225) rose by 1. 88%, China’s FTSE China A50 (CHA50) added 0.06%, Hong Kong’s Hang Seng (HK50) increased by 1.35%, and Australia’s ASX 200 (AU200) showed a positive result of 0.15%. The Hang Seng Index is showing steady monthly growth of around 5%, recovering from sharp losses in the previous period. The recovery was aided by strong GDP data for the first quarter, a 90-day tariff pause between the US and China, high IPO activity, and a resurgence in tourism.

In Australia, retail sales unexpectedly fell by 0.1% month-on-month in April, reversing the 0.3% growth in March, which was also in line with the consensus expectations. In addition, building permit data was also unexpectedly low, heightening concerns about a weakening economic outlook. The data reinforced expectations that the Reserve Bank of Australia will maintain its easing bias after cutting rates by 25 basis points last week.

According to Reserve Bank Deputy Governor Karen Silk, interest rates in New Zealand are now in a neutral range of 2.5-3.5%, and further changes will depend on economic developments, as past rate cuts have not yet fully taken effect. She also noted that uncertainty in global trade remains high, but expects the economy to recover, supported by previously adopted easing measures that may offset some risks. The Reserve Bank of New Zealand (RBNZ) cut rates by 25 basis points to 3.25% at its May meeting, signaling that the easing cycle may be coming to an end after cutting rates by 225 basis points since August.