Daily market update: Tariffs ruling, Nvidia, China & US trade policy, Auto Trader

“The US Court of International Trade has generated some hope in the market that the tariff threat might be wiped away with its latest ruling,” says AJ Bell investment director Russ Mould.

“For the court to determine that President Trump didn’t have the authority to impose the ‘Liberation Day’ tariffs is a pretty seismic development.

“That the gains were measured rather than blockbuster reflects a healthy level of scepticism over whether this can truly rein in the Trump administration, which has already launched an appeal against the judgement.

“The problem for investors is it could prolong uncertainty even if, ultimately, it results in a better outcome from a market perspective. It also exacerbates the issue of how the big tax cuts being brought forward in the US will be funded – given revenue from tariffs was supposed to help on this front. The first thing to watch is whether or not the administration’s appeal against the decision is successful.

“The news has given global financial markets an undoubted lift though, with strong results and a bullish outlook from AI chipmaker Nvidia also positive for sentiment.

“In London, stocks and investment trusts with exposure to the US moved higher. The bond market though continues to flash a warning signal with yields on sovereign debt moving higher amid a weak auction for 40-year Japanese government debt at the start of this week.

“Renewed concern about inflation were also pushing yields higher as expectations for rate cuts on both sides of the Atlantic are dampened.”

Nvidia

“US chip manufacturer Nvidia has eased concerns about the impact of tariffs and China risks with its latest quarterly numbers. For all the noise around Nvidia, its ability to continue churning out substantial growth is highly impressive.

“Sales and profit for the three months to 30 April both came in ahead of forecasts and, while the company’s revenue guidance for the current quarter was a touch light, it did enough to generate excitement among investors and send its shares higher in after hours trading as it outlined an optimistic medium-term outlook for sales.

“The company sees significant potential in markets like Saudi Arabia, the United Arab Emirates and Taiwan. If China-US trade tensions are a speed bump, they look to be a manageable one for Nvidia.

“Its chips are key to the roll-out of AI and demand here continues to be rapacious. That’s not to say it wouldn’t be extremely helpful to the company if the Trump administration reversed its policy of blocking the sale of AI chips to China – the friendly tone adopted by CEO Jensen Huang towards President Donald Trump perhaps aimed at driving a rethink here.”

Auto Trader

“You would think a buoyant market for used cars would be great news for a platform like Auto Trader but actually if anything it’s been too easy to sell second-hand vehicles of late.

“Thanks to limited supply and exceptionally strong demand, car tyres are barely touching the forecourt before they are snapped up and this means there is less need for retailers to buy advertising slots from Auto Trader.

“These market dynamics have also made it harder to upsell clients to more expensive packages. This has caused growth to stall and seen the shares go firmly into reverse on the publication of full-year results.

“There has also been some disquiet from independent garages online who feel they are being squeezed a little too hard by the company. Although whether this will translate into lost business is another question.

“After all, Auto Trader’s website is the one most visited by prospective car buyers because it has the most listings. Car retailers are therefore compelled to use its products, reinforcing its leading position. This will support the business in the long term but hasn’t protected it from some short-term disappointment today.”

These articles are for information purposes only and are not a personal recommendation or advice.