New York — U.S. stock markets saw gains on Thursday, buoyed by a federal court’s decision to invalidate former President Donald Trump’s controversial “reciprocal” tariffs. This legal victory, combined with a surge in shares of artificial intelligence leader Nvidia following strong quarterly earnings, contributed to a positive trading atmosphere.

The S&P 500 rose 0.8%, while the Nasdaq Composite surged by 1.5%, bringing it back into positive territory for the year. The Dow Jones Industrial Average managed to add 46 points, marking a 0.1% increase. Analysts noted that the rally was driven not only by the legal ruling but also by growing optimism surrounding technology stocks, particularly Nvidia, which reported impressive growth in its data center business.

On Wednesday evening, the U.S. Court of International Trade ruled that Trump exceeded his authority with the imposition of tariffs, ordering the associated tariffs to be vacated. This decision addressed concerns that arose after market volatility earlier in the year when trade policy, including Trump’s shifting stance, threatened to escalate inflation fears.

Investor sentiment had been shaken last month as businesses responded to the potential impact of tariffs on earnings and market forecasts. The ruling seems to have allayed some of those worries, although it has also sparked discussion about the possibility of prolonged trade negotiations that could delay resolutions beneficial to market stability.

Despite the court’s ruling, analysts remain cautious, pointing out that Trump may still pursue other legal options to implement his tariff agenda. “The tariff situation is far from resolved,” noted Adam Crisafulli of Vital Knowledge. “Many investors expect that the former president will seek to reinstate tariffs through different legal channels.”

Nvidia’s stock experienced a notable increase of over 5% as the company reported quarterly earnings that surpassed expectations. The chipmaker attributes this success to a remarkable 73% year-over-year growth in its data center sector, signaling a robust demand for AI technologies.

“Wednesday’s earnings report was significant for Nvidia and the overall stock market, reigniting investor optimism as it emphasizes the power of AI,” remarked James Demmert, Chief Investment Officer at Main Street Research. The positive outlook from Nvidia has contributed to a broader uptick, with the S&P 500 climbing 6% in May and the Nasdaq enjoying an 11% increase during the same period.

Moreover, the recent easing of threats regarding substantial tariffs on the European Union has also played a role in rejuvenating market confidence. Trump’s decision to push back the proposed 50% tariff deadline to July 9 has been welcomed by investors who view it as a step toward stabilizing trade relations.

As markets recalibrate in response to these developments, companies across various sectors will closely monitor how trade policies evolve and the potential impact on consumer behavior and earnings forecasts in the months ahead.