Stock market today: S&P 500 rides Nvidia rally higher despite tariff uncertainty

Investing.com-- The S&P 500 closed higher Thursday as a surge in Nvidia helped offset fresh uncertainty around President Trump’s reciprocal tariffs after the U.S. court ruling against them. 

At 4:00 p.m. ET (20:00 GMT), the Dow Jones Industrial Average rose 117 points, or 0.3%, the S&P 500 index gained 0.4%, and the NASDAQ Composite added 0.4%. 

The major U.S. indices are on track to close the week, and month, higher. Before Thursday’s session, the S&P 500 and DJIA are up 1.5% and 1.2% this week, respectively, while the NASDAQ Composite has rallied nearly 2%. 

This month, the S&P 500 has gained 5.7%. The Dow has added 3.5%, while the Nasdaq has jumped 9.5%.

Trump’s tariffs blocked by trade court, but then reinstated, keeping uncertainty front and center

Trump’s proposed reciprocal tariffs against major U.S. trading partners were blocked by the Court of International Trade late Wednesday, which ruled that the president superseded his authority in imposing sweeping tariffs.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. 

While the decision raised optimism that Trump’s sweeping tariff agenda, which markets fear could greatly disrupt economic growth and corporate profits, will be blocked, it added another layer of trade uncertainty. 

Nvidia rallies on strong quarter 

Nvidia (NASDAQ:NVDA) stock rose strongly after the chipmaker reported 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. 

These 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. 

The guidance was "impressive," Wedbush said, as the company "also indicated the loss of H20 revenue will represent an $8B headwind to sales this quarter."

Nvidia acts as a bellwether for AI demand, with its earnings signaling that companies will continue to spend billions on building more AI infrastructure. 

Elsewhere, Tesla (NASDAQ:TSLA) stock rose after CEO Elon Musk confirmed he was leaving his role in the Trump administration, ensuring he can focus his energies on running the electric vehicle giant.

Kohl’s (NYSE:KSS) stock gained after the department store chain reported a smaller quarterly loss than its previous forecast and maintained its annual targets, as it focuses on turnaround efforts to cut costs.

Best Buy (NYSE:BBY) stock fell after the retailer slashed its outlook for fiscal 2026 to reflect the impact of tariffs, offsetting its better-than-expected results for the first quarter.

GDP contracted in Q1 

This positive news has overshadowed weak economic data, indicating that the Trump administration’s volatile trade policies are weighing heavily on sentiment.

The U.S. economy contracted in the first quarter, with gross domestic product showing a decline of 0.2% annualized in the January-March quarter, the BEA said in its second estimate of GDP.

The economy was initially estimated to have contracted at a 0.3% pace. It grew at a 2.4% rate in the fourth quarter. 

Additionally, the number of Americans filing new applications for unemployment benefits increased more than expected last week, while the jobless rate appeared to have picked up in May as labor market conditions continue to ease.

Initial claims for state unemployment benefits rose 14,000 to a seasonally adjusted 240,000 for the week ended May 24, the Labor Department said on Thursday.

There are a number of Fed speakers, including Bank of Richmond President Thomas Barkin, Fed Bank of Chicago head Austan Goolsbee and Bank of Dallas head Lorie Logan, due during Thursday’s session.

Peter Nurse, Ambar Warrick contributed to this article.