Breakfast News: Tariffs Blocked by Court

Breakfast News: Tariffs Blocked by Court

Source: Image Created by Jester AI.

1. Futures Rise as Court Bars Tariffs

A U.S. Federal court has ruled President Trump's use of emergency powers did not give him unilateral power to impose tariffs. The Court of International Trade has blocked the imposition of some levies and invalidated the orders, causing S&P 500 futures to rally over 1.5%.

• "It is not for unelected judges to decide how to properly address a national emergency": The immediate implications of the ruling are unclear, with White House deputy press secretary Kush Desai rebutting the news. The decision has been appealed, with a higher court potentially being more friendly toward the Trump administration.
• Steel and aluminum tariffs not impacted: The emergency measures used by the president for the April 2 announcements are different to other laws used to impose more sectoral-level levies. Futures in the tech-focused Nasdaq rose over 2% in pre-market trading, helped in part by positive results from AI business bellwether Nvidia (NVDA 3.23%), although there was no overly dramatic move in the stock price this time round...

2. Nvidia Results Impress Despite China Hit

Nvidia jumped almost 5% after the market closed following quarterly results showing a 73% rise in data center sales and a limited impact from trade disruption with China.

• "China is one of the world's largest AI markets and a springboard to AI success": CEO Jensen Huang noted the $4.5 billion hit from U.S. trading restrictions with China, with another $8 billion expected for the coming quarter. Yet Huang said China's AI market will move on with or without Nvidia chips.
• Deeply invested in the American AI future: Huang expects Nvidia to build everything from chips to supercomputers in the U.S. by the end of the year, in a move that should help avoid future problems with the current administration.

3. Synopsys, Cadence Face China Restrictions

The Trump administration has told companies in electronic design automation (EDA) groups, including Hidden Gems recommendation Synopsys (SNPS -1.64%) and Cadence Designs (CDNS -1.46%), to stop selling their services to China, causing related stocks to fall.

• Making it harder for China to develop advanced chips: The directive has reportedly been communicated to related companies, with the potential for suspension of export licenses. It comes at a delicate time when trade talks between the two nations are ongoing.
• 80% of the China EDA market with three companies: Trade to China is dominated by Synopsys, Cadence, and a Siemens subsidiary, with it accounting for 16% of revenue for Synopsys and 12% for Cadence in 2024.

4. Veeva Systems Ventures up Over 15%

Stock Advisor rec Veeva Systems (VEEV 18.91%) rocketed higher after the closing bell thanks to a strong beat in quarterly revenue and earnings per share (EPS), with subscription income picking up.

• "We're embedding AI deeply into core applications": CEO Peter Gassner talked up the results, calling it the best quarter ever. He further spoke of Veeva AI getting off to a good start as a major initiative.
• Pushing clients to CRM conversions: The results showed 200 clients being migrated to the Vault CRM platform. The superior features and integration it provides is another avenue of potential growth for the company.

5. Evening Earnings to Watch: DELL, ZS, ULTA

Dell (DELL -0.14%) releases results after the market closes, with investors keen to see how the AI order backlog from last quarter is developing, as well as demand trends in commercial versus consumer PC products.

• Beating the S&P 500 by 62% since 2022 Hidden Gems rec: Zscaler (ZS -0.85%) will report after hours, with an update on adoption of the AI-integrated security solutions, which the business had previously flagged as a key growth opportunity.
• EPS expected to fall by 11% versus last year: Ulta Beauty (ULTA 1.19%) puts out earnings when the closing bell sounds. Although demand will be a focus, cost control will be on shareholders' minds after the jump in store payroll and benefits last quarter.

6. Your Take

All of the Magnificent Seven have now reported this earnings season, but which one do you think will have the largest market capitalization in – let's say – 7 years' time, and why? Debate with friends and family, or become a member to hear what your fellow Fools are saying.

Which tangential opportunities to weight-loss drugs are you most excited by, and/or which are you most fearful of? Discuss with friends and family, or become a member to hear what your fellow Fools are saying.