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US equities climbed on Thursday, buoyed by a federal court decision that struck down President Donald Trump’s “reciprocal” tariffs and a strong post-earnings rally in Nvidia shares.

The S&P 500 rose 0.5%, while the Nasdaq Composite gained 0.8%, returning to positive territory for the year.

The Dow Jones Industrial Average edged up 0.11%, though gains were capped by a more than 5% decline in Salesforce stock following its earnings release.

The advance followed a ruling late Wednesday by the US Court of International Trade, which determined that Trump had exceeded his authority in imposing the controversial tariffs.

The court ordered the tariff orders vacated, easing trade-related concerns that had lingered in markets.

For the week, the S&P 500 is up 2.2%, the Dow has climbed 1.3%, and the Nasdaq has rallied 3%.

The technology sector, in particular, has surged more than 10% in May, bolstered by artificial intelligence announcements from Alphabet (GOOGL) and other major players.

Court halts Trump’s tariffs
 

A three-judge panel on the US Court of International Trade delivered a setback to President Donald Trump’s trade policy on Wednesday evening, ruling that he overstepped his authority in imposing a broad set of reciprocal tariffs.

The court found that the 1977 statute cited by Trump does not grant the executive branch the power to unilaterally enact such sweeping trade measures.

As a result, the judges ordered a permanent halt to the contested tariffs and prohibited any future modifications under the same legal justification.

The ruling affects tariffs imposed on over 180 countries and territories, including those on Canada, Mexico, and China that were tied to anti-drug trafficking initiatives.

However, existing tariffs targeting specific products, such as steel and aluminum, remain unaffected.

The Trump administration has 10 days to comply with the court’s order, though it has already filed an appeal.

Nvidia’s results cheer up the market
 

In one of the most anticipated earnings announcements of the season, Nvidia (NVDA) surpassed Wall Street’s expectations on both revenue and profit, driven by a 73% year-over-year surge in data center sales.

The chipmaker reported a revenue increase of 69% from the same quarter last year.

For the current quarter, Nvidia projected $45 billion in sales, slightly below LSEG consensus estimates.

The company delivered adjusted earnings per share of 96 cents, beating the LSEG analyst consensus of 93 cents.

Revenue came in at $44.06 billion, also ahead of the expected $43.31 billion.

However, the company noted that the forecast would have been $8 billion higher if not for the impact of US export restrictions on its H20 chips.

On the earnings call, CEO Jensen Huang underscored the effect of the trade curbs, stating that the “$50 billion China market is effectively closed to US industry.”

Despite the headwinds, Nvidia’s results were well received. Shares were up more than 5% Thursday morning, fueling a broader rally in semiconductor stocks globally.

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