Nvidia shares jump, tariff ruling lifts stocks, Musk departs DOGE: Live Updates

U.S. stocks rose Thursday driven by a federal court blocking President Trump's tariffs and Nvidia's strong Q1 results, with the Dow up 0.09%, the S&P 500 rising 0.7%, and the Nasdaq gaining 1.3%; Nvidia shares increased after reporting a 26% YoY increase in net income to nearly $19 billion and a 69% increase in revenue to $44 billion, although Q2 sales projections are below estimates due to China export controls. Separately, initial jobless claims increased more than expected, and Elon Musk announced the end of his role with DOGE.

Analysis

U.S. equity markets experienced upward momentum, with the S&P 500 and Nasdaq Composite rising 0.7% and 1.3% respectively, while the Dow Jones Industrial Average saw a modest 0.09% increase. This positive sentiment was primarily fueled by two key developments: a federal court ruling that President Trump's "reciprocal" tariffs were imposed illegally, thereby blocking them, and robust first-quarter results from Nvidia. Nvidia (NVDA) reported a significant 26% year-over-year increase in net income to nearly $19 billion and a 69% YoY surge in revenue to $44 billion, driven by its data center segment which saw revenue climb to $39 billion, up 73% YoY and 10% QoQ. Despite these strong Q1 figures, which beat analyst expectations and led to a 3% rise in NVDA shares in after-hours trading, the company projected second-quarter sales below estimates, citing tightening U.S. export controls to China affecting some AI chips. Nvidia continues to advance its AI capabilities, with its Blackwell NVL72 AI supercomputer now in full-scale production.

The U.S. Court of International Trade's decision to vacate the tariffs, citing the President overstepped authority under IEEPA, provided a market uplift, though the Trump administration's immediate appeal introduces ongoing uncertainty. This trade policy development intersects with evolving labor market signals; initial jobless claims for the week ended May 24 rose by 14,000 to a seasonally adjusted 240,000, exceeding economists' forecasts of 230,000. A Bank of America Institute report highlighted an increase in unemployment benefit recipients across income levels, particularly a sharp rise for higher-income households between February and April. While economists anticipate claims might temporarily breach the 205,000-243,000 range in June, this is not yet seen as a material shift in labor conditions, partly due to worker hoarding.

In other corporate news, e.l.f. Beauty (ELF) shares surged over 17% following the announcement of its $1 billion acquisition of Rhode skincare. Citigroup (C) and JPMorgan (JPM) shares have shown year-to-date gains of nearly 7% and 10% respectively, outperforming the S&P 500. Additionally, Elon Musk's departure from his role at the Department of Government Efficiency (DOGE) is expected to allow him to return his full attention to Tesla (TSLA), a development likely monitored closely by its investors.

Key Decisions for Investors

• Investors should weigh Nvidia's strong Q1 performance and AI leadership, exemplified by its Blackwell platform, against the cautious Q2 sales outlook stemming from China export controls, necessitating close monitoring of geopolitical impacts on semiconductor trade.
• The federal court's nullification of certain tariffs offers a positive, albeit potentially temporary, market catalyst; however, the administration's appeal means continued trade policy uncertainty, warranting a cautious stance and preparedness for potential renewed volatility.
• Consider the implications of rising initial jobless claims and the broadening receipt of unemployment benefits across income tiers as potential early indicators of labor market easing, which, combined with trade uncertainties, could influence sector allocation and risk appetite.
• The significant positive market reaction to e.l.f. Beauty's acquisition of Rhode skincare highlights investor appetite for strategic growth initiatives; ELF investors should monitor the integration process and synergy realization for sustained value creation.
• Tesla investors may view Elon Musk's departure from DOGE and anticipated return to full focus on the company as a positive development, potentially alleviating concerns about management bandwidth, though operational execution remains key.