SINGAPORE – While US stock futures jumped, Asia markets on May 29 reacted cautiously to news that a US federal court has blocked President Donald Trump’s “Liberation Day” tariffs from going into effect.
The US Court of International Trade ruled on May 28 that Mr Trump overstepped his authority by imposing across-the-board duties on imports from nations that sell more to the United States than they buy.
The White House quickly appealed the decision, and could take it all the way to the Supreme Court if needed, but in the meantime it offered some hope that Mr Trump might back away from the highest tariff levels he had threatened.
“We’re just trying to work out what it might mean basically but obviously the market is doing a knee-jerk reaction,” said Mr Ray Attrill, head of FX strategy at NAB.
“So this may be an absolute storm in a teacup or potentially something more significant.”
Japan’s Nikkei rallied 1.4 per cent, while South Korea’s Kospi added 1.2 per cent and Tawan’s Taiex index rose 0.5 per cent. But stock indices in Hong Kong, China and Australia were flat.
Singapore’s Straits Times Index was down 0.1 per cent at 9.55am after edging up earlier.
Earlier, S&P 500 futures climbed 1.5 per cent, while Nasdaq futures rose 1.8 per cent. The latter had already been lifted by relief over earnings from Nvidia, which beat sales estimates.
The chipmaker and AI darling also projected strong revenues for the current quarter, sending its shares up 4.4 per cent after hours.
That news helped offset a Financial Times report that the White House had ordered US firms that offer software used to design semiconductors to stop selling their services to Chinese groups.
The New York Times separately reported the US had suspended some sales to China of critical US technologies, including those related to jet engines, semiconductors and certain chemicals.
The US dollar rallied against safe-haven peers, jumping 0.7 per cent to 145.83 yen and 0.8 per cent to 0.8339 Swiss franc.
Mr Kyle Rodda, senior financial market analyst with Capital.com, said: “It’s massive news. It’s long been suggested that the emergency powers Trump has used to implement tariffs were unconstitutional and that the power to enact tariffs sits with Congress.
“It sets up a battle that will likely end up in the Supreme Court now. It’s a situation fraught with danger because the administration may ignore the court’s ruling, potentially placing greater strain on US institutions at a time of increased stress.
“However, should the markets get their way, the courts could delay and then deny these tariffs, removing one massive risk and undoubtedly stoking risk appetite.” REUTERS, BLOOMBERG
Join ST’s Telegram channel and get the latest breaking news delivered to you.
