More Uncertainty Hits Wall Street as Court Reinstates Tariffs

The Trump administration’s tariffs were put on hold this week, and the stock market started the day off in a positive mood. However, the government appealed the court’s decision, and these tariffs were quickly reinstated. The reinstatement is temporary, but it will likely drag on as the court case does.

This has added another layer of uncertainty on Wall Street. Not only do investors have to track ongoing trade deals and the rapid policy changes of the current administration, but they also have to track this new court case to stay on top of the market.

According to a Fox business reporter on X, “The very few lawyers I know who are involved in the U.S. Court of International Trade and the appeals process of its rulings tell me Trump would have been better off NOT appealing to the federal circuit in DC because it’s packed w Obama-Biden appointed judges; they are inclined to rule against him in the legality of his using an emergency order to announce sweeping tariffs. They say he should [have] appealed directly to SCOTUS, which is also not an easy lift given recent anti-Trump rulings but still better odds.”

Here’s a market update as of 10:30 AM (ET) today.

• The S&P 500 is down 4.78 points, or 0.08%.
• The Nasdaq Composite is down 55.62 points, or 0.29%.
• The Dow Jones Industrial Average is up 42.9 points, or 0.1%.

Macros

Macros came in good again today. The economy does not seem to be suffering from the tariff whiplash over the past two months. Hard data staying solid will likely give the Federal Reserve more confidence to carry on with their rate cut cycle, and it should also help Treasuries.

• U.S. PCE for April came in at 2.1% vs. the 2.2% estimate.
• U.S. Core PCE came in at 2.5% vs the 2.5% estimate.
• U.S. PCE ticked up 0.1% month-over-month. Again, basically in line with estimates.
• U.S. Core PCE month-over-month also rose 0.1% and met estimates.

• The University of Michigan also posted its sentiment report. It came in at 52.2 vs. the 51.5 forecast.
• UMich’s 1-year inflation expectations have also come down to 6.6% from 7.3% previously. It was expected to be revised down to 7.1%, but even the university expects that the impact of tariffs on inflation is likely to be lower than previously thought.
• UMich’s 5-year inflation expectations have been lowered to 4.2% from 4.6% previously.
• UMich’s Conditions data came in at 58.9 vs. the 58 forecast.
• UMich’s PMI came in at 40.5 vs. the 45 forecast.

Traders are now betting on a September rate cut by the Fed.

Other Assets

• Gold is down 1% to $3,308.
• Crude Oil Futures are down 0.6%.
• Natural Gas Futures are down 2%.
• Bitcoin is down 0.2% to $105,437.

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