It’s not every day that a court ruling makes global markets celebrate, but that’s exactly what happened this Thursday.
After months of turbulence, investors finally got some relief — and they have a federal court to thank.
In a dramatic turn of events, a panel of judges ruled that most of former President Donald Trump’s sweeping tariffs were unlawful.
The news sent U.S. stock futures soaring and brought a huge dose of optimism back to trading floors.
While Trump is expected to challenge the ruling, markets responded swiftly and positively to the legal decision.
Judges Rule Trump Overstepped His Powers with Trade Tariffs
On Wednesday night, the U.S. Court of International Trade delivered a major legal blow to Trump’s economic legacy.
A three-judge panel unanimously decided that the former president went beyond his constitutional authority when he declared the U.S. trade deficit a “federal emergency” to justify enacting tariffs on global trade partners.
The judges, appointed by Ronald Reagan, Barack Obama, and Trump himself, agreed that Congress — not the president — holds the power to impose such measures.
The ruling means that the vast majority of Trump’s tariffs are now considered legally invalid.
Markets Surge on News of Tariff Reversal
As the news broke, global markets rejoiced. All three major U.S. indices jumped in after-hours trading and were poised to open significantly higher.
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Dow Jones futures rose 0.3%
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S&P 500 futures surged 0.9%
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Nasdaq 100 futures jumped 1.4%, largely thanks to strong earnings from tech giant Nvidia
By the time the stock market officially opened Thursday morning, the momentum carried through.
The Dow Jones Industrial Average was up 64 points (0.2%), the S&P 500 gained 0.8%, and the Nasdaq Composite shot up by 1.5%.
GameStop and AMC Add a Billion Dollars to the Market
It wasn’t just tech stocks benefitting. In a surprising twist, GameStop and AMC Entertainment added a combined $1 billion to the U.S. stock market at opening.
The surge came mere hours after the ruling against Trump’s tariffs, adding to the upbeat sentiment among traders.
Investors Seek Safety as Treasury Yields Drop
In another sign of shifting economic expectations, Treasury yields fell Thursday.
When yields decline, it typically signals that prices are rising — a classic move when investors are seeking safety.
The broader belief is that this court ruling may help stabilize inflation and cool off fears of a prolonged economic slowdown.
Interestingly, the Bureau of Economic Analysis also revised its GDP data for the first quarter of 2025.
The economy contracted slightly less than previously thought — a 0.2% dip instead of 0.3% — which helped soften the blow from recent volatility.
The White House Fires Back at the Judges
Not everyone was thrilled with the ruling. The White House didn’t hold back, calling out the panel of “unelected judges” for blocking what Trump’s team still insists was an emergency response to unfair trade practices.
White House official Desai argued that foreign nations have treated the U.S. unfairly for years, leading to persistent trade deficits.
“It’s not for unelected judges to decide how to properly address a national emergency,” he said.
Even Stephen Miller, one of Trump’s most vocal former aides, weighed in — calling the ruling an “out of control… judicial coup.”
Trump’s Legal Justification Falls Flat
At the heart of Trump’s tariff policy was a controversial claim: that America’s trade deficit amounted to a national crisis.
That declaration allowed him to bypass Congress and levy tariffs on nearly every major trade partner.
But the court wasn’t convinced. The panel sided with Democratic-led states and small businesses that had filed multiple lawsuits against the tariffs.
In their view, the president didn’t have the authority to invoke emergency powers for something as routine as a trade imbalance.
What This Means for Global Trade and the U.S. Economy
The decision could have major implications for international trade going forward.
With the tariffs now legally blocked, there’s renewed hope for smoother trade relationships between the U.S. and its partners.
It also provides breathing room for domestic businesses that had been burdened by higher costs on imported goods.
At the same time, Trump’s likely appeal means the legal fight isn’t over just yet — and markets will be watching closely.
The Broader Takeaway: Checks, Balances, and Economic Calm
This moment serves as a reminder of how power is divided in the U.S. system — even former presidents can’t act without limits. And for now, the markets are cheering that clarity.
Whether Trump manages to revive his tariffs or not, the message from the court was loud and clear: emergency powers don’t give you a blank check.
The economic calm following the chaos is a welcome change for traders, businesses, and American consumers alike.