Investing.com-- U.S. stock index futures rose sharply on Wednesday evening following strong earnings from artificial intelligence major Nvidia, while a court ruling against President Donald Trump’s trade tariffs also aided sentiment.
Nvidia rose sharply in aftermarket trade, underpinning gains in broader tech stocks, especially chipmakers, which had lost ground during Wednesday’s session on reports of more U.S. export restrictions against China.
Losses in tech also dragged down Wall Street.
Futures extended gains after the U.S. Court of International Trade ruled on Wednesday that Trump did not have the authority to impose his sweeping “liberation day” tariffs, ramping up hopes that the tariffs will not come into effect from an early-July deadline.
S&P 500 Futures jumped 1.5% to 5,989.0 points, while Nasdaq 100 Futures surged 1.7% to 21,752.25 points by 19:39 ET (23:39 GMT). Dow Jones Futures rose 1.1% to 42,642.0 points.
Nvidia rallies on strong Q1, underpins tech
NVIDIA Corporation (NASDAQ: NVDA ) rose nearly 5% to $141.26 in aftermarket trade, with gains also spilling over into broader tech stocks.
The chipmaker clocked stronger-than-expected first-quarter earnings, indicating that demand for AI chips and data center servers remained robust. Nvidia flagged strong orders from Wall Street’s biggest spenders on AI infrastructure.
Nvidia’s strong earnings helped investors look past a softer-than-expected forecast for the current quarter, as the company also flagged a $8 billion hit to sales from stricter U.S. export controls against China.
Nvidia acts as a bellwether for AI demand, with its earnings signaling that companies will continue to spend billions on building more AI infrastructure.
This notion sparked gains in broader tech stocks, especially in chipmakers. TSMC (NYSE: TSM )- the world’s biggest contract chipmaker and a key Nvidia supplier- rose nearly 2% after hours, while tech giants such as Amazon.com (NASDAQ: AMZN ), Alphabet (NASDAQ: GOOGL ), Meta Platforms (NASDAQ: META ), and Microsoft (NASDAQ: MSFT ) rose between 1% and 4%.
Trump’s ‘liberation day’ tariffs blocked by trade court
Trump’s proposed reciprocal tariffs against major U.S. trading partners were blocked by the Court of International Trade on Wednesday, which ruled that the president superseded his authority in imposing sweeping tariffs.
The ruling was on a lawsuit filed by the Liberty Justice Center on behalf of five small U.S. businesses that import goods from the countries targeted by Trump’s tariffs.
The trade court ruled that the International Emergency Economic Powers Act invoked by Trump in imposing his tariffs did not grant him sufficient authority to impose his tariffs.
Investors were seen betting that the ruling will block Trump’s sweeping tariff agenda, which markets fear could greatly disrupt economic growth and corporate profits.
The White House can contest the ruling.
Wall Street had fallen on Wednesday amid heightened uncertainty over more U.S. trade restrictions against China. The minutes of the Federal Reserve’s May meeting, released on Wednesday, also highlighted increased concerns over the economic impact of Trump’s tariffs.
The S&P 500 fell 0.6% to 5,888.56 points, while the NASDAQ Composite fell 0.5% to 19,100.94 points. The Dow Jones Industrial Average fell 0.6% to 42,098.70 points.