U.S. stock markets and the dollar retreated on Thursday after a federal appeals court granted the Trump administration’s request to temporarily pause a trade court ruling that had blocked sweeping tariffs imposed on global trading partners. The decision triggered a wave of uncertainty, prompting investors to flock to safe-haven assets such as gold and the euro.
The Court of International Trade had ruled earlier in the week that former President Donald Trump lacked the authority to enact broad import levies under the International Emergency Economic Powers Act (IEEPA). That decision was overturned late Thursday when a federal appeals court agreed to pause enforcement, allowing the administration more time to defend the legality of the tariffs.
“The Trump tariff agenda is alive, well, healthy and will be implemented to protect you, to save your jobs and your factories,” said Peter Navarro, Trump’s former trade adviser. Federal officials indicated that alternative legal channels exist for imposing the tariffs, though enacting them could take several months.
White House Press Secretary Karoline Leavitt criticized the original court decision, warning that it could undermine the executive branch’s ability to conduct trade policy. “Ultimately, the Supreme Court must put an end to this for the sake of our Constitution and our country,” she said.
Financial markets reacted swiftly. U.S. stocks, which had initially rallied following the trade court’s earlier ruling and strong earnings from tech giant Nvidia, reversed course. The Dow Jones Industrial Average futures dipped 0.08% by 4 a.m. CEST on Friday, while the S&P 500 and Nasdaq 100 futures fell 0.26%. European markets also trended lower, with the Euro Stoxx 50 down 0.19% and Germany’s DAX shedding 0.15%.
In Asia, stock markets closed mostly in the red. The Hang Seng Index dropped 1.4%, Japan’s Nikkei 225 lost 1.39%, and South Korea’s Kospi declined 0.61%. Australia’s ASX 200 remained flat in early trading.
The U.S. dollar also slumped, giving up earlier gains. Yields on 10-year Treasury bonds fell to 4.42% after briefly hitting 4.5%. In contrast, safe-haven assets rallied. Gold surged from an intraday low of $3,269 to $3,321 per ounce. The euro also strengthened, rebounding from a low of 1.1210 to trade at 1.1353 against the dollar by early Friday.
Investors are now closely watching developments in U.S.-EU trade talks, with the legal battle over tariffs adding fresh complications to the global economic outlook.
