Dow Jones whipsaws after tech rally crashes against tariff ruling

The Dow Jones soared in overnight trading after Q1 Nvidia (NVDA) earnings beat the street again.
Federal courts axed Trump’s “reciprocal” tariffs, citing misappropriation of national security laws.
Equities fizzled during pre-market trading as investors await to see how the Trump administration will react.

The Dow Jones Industrial Average (DJIA) whipsawed through the overnight session and into Thursday’s trading window, with investors piling back into the tech rally after Nvidia (NVDA) posted better-than-expected quarterly earnings in Q1. The United States (US) Federal Courts also struck down President Donald Trump’s wide-reaching “reciprocal” tariffs overnight, adding a fresh layer of chaos to markets as investors brace for the Trump administration’s reaction.

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Tariffs off?

Citing the International Emergency Economic Powers Act (IEEPA), President Donald Trump has been grappling to impose broad import taxes with generally low levels of success. The Trump administration has been waylaid by a constant cycle of walkbacks and tariff delays. Government-imposed import fees have taken on a quantum state within the White House, meant to both raise government revenues but also strongarm other countries to the negotiation table for “trade deals” in the hopes of earning a tariff reduction.

The US Court of International Trade struck down Donald Trump’s sweeping “reciprocal” tariffs on Wednesday, stating that Trump’s “Worldwide Retaliatory Tariff Orders” broadly exceed the bounds of the IEEPA, which allows the President to bypass Congress to impose restrictions on trade during a national emergency. The Trump administration is expected to expedite the appeals process to get the decision in front of the Supreme Court, which has tended to rule in favor of Trump over precedent in the past.

US data eases slightly, PCE inflation in the barrel for Friday

US data broadly came in poor to mixed on Thursday, weighing on equities further, albeit to a limited extent. US Pending Home Sales fell to a one-year low of -6.3%, week-on-week Initial Jobless Claims rose more than expected to 240K, and Q1 Gross Domestic Product (GDP) contracted 0.2% on an annualized basis.

US Personal Consumption Expenditure Price Index (PCE) inflation for April is due on Friday and will be a key reading for investors. As the Federal Reserve’s (Fed) favored measure of inflation, PCE price growth has a direct link to when the Fed will move interest rates, and by how much.

Dow Jones price forecast

The Dow Jones Industrial Average pulled back sharply from weekly highs posted during the overnight session, falling back to the 42,000 region. The major equity index remains embedded in a near-term consolidation zone, with price action hobbled just north of the 200-day Exponential Moving Average (EMA) near 41,685.

Dow Jones daily chart

Economic Indicator

Gross Domestic Product Annualized

The real Gross Domestic Product (GDP) Annualized, released quarterly by the US Bureau of Economic Analysis, measures the value of the final goods and services produced in the United States in a given period of time. Changes in GDP are the most popular indicator of the nation’s overall economic health. The data is expressed at an annualized rate, which means that the rate has been adjusted to reflect the amount GDP would have changed over a year’s time, had it continued to grow at that specific rate. Generally speaking, a high reading is seen as bullish for the US Dollar (USD), while a low reading is seen as bearish.