Nasdaq 100 Rallies on Court Tariff Ruling and NVDA Earnings, But Then Loses Momentum

Also, 10-year T-note, gold, crude oil and euro futures

1. Nasdaq 100 E-mini futures (/NQ): +0.38% 
2. 10-year T-note futures (/ZN): +0.18% 
3. Gold futures (/GC): +0.36% 
4. Crude oil futures (/CL): -1.62% 
5. Euro futures (/6E): +0.53% 

The firehose of news in the past 24 hours has left traders uncertain about what will happen next in global financial markets. Where to begin? Elon Musk is officially leaving DOGE. Nvidia beat earnings expectations comfortably, and CEO Jensen Huang offered strong guidance in the conference call. And a panel of three judges at the U.S. Court of International Trade struck down Trump’s Liberation Day tariffs. With respect to that last point, it’s worth reading the actual court decision: The tariffs can’t be applied for the current rationale; the Trump admin can still apply the tariffs for different reasons. 

Nasdaq 100 futures (/NQM5) rose 0.37% in early trading after Nvidia (NVDA) helped lift market sentiment following an upbeat earnings report. The chipmaker was up over 4% this morning. The beauty stock E.l.f. Beauty (ELF) rose nearly 25% after beating estimates. Best Buy (BBY) fell 9% after the retailer cut its guidance for the year, noting headwinds from tariffs. Tesla (TSLA) rose 2% after Elon Musk confirmed he was stepping away from his government role to focus on the company. Meanwhile, investors are mulling over what a recent court ruling against President Trump’s tariffs means for the market.  

Bond yields were down on this morning, with 10-year T-note futures (/ZNU5) rising 0.21% in early trading. The underlying yield slipped back below the 4.5% mark. Bond investors have pushed yields up recently because of uncertainty around tariffs and the GOP tax and spending bill. The court decision regarding tariffs is likely taking some upside pressure off bonds, buts it's too early to tell if that narrative will last. The Treasury will auction seven-year notes today.  

The drop in yields and a softer dollar created some upside for precious metals. Gold futures (GCQ5) rose 0.4% in early trading. The metal continues to show support around the 3,300 level, but prices remain off from the April swing high. The worse-than-expected print on the labor market is helping fuel some uncertainty in how the Federal Reserve will navigate cutting rates later this year. Meanwhile, gold miner stocks continue to outperform gold this month, with the VanEck Gold Miners ETF up over 2% since the start of the month.  

Crude oil prices (/CLN5) trimmed overnight gains to trade negative on this morning, falling about 1%. The market is now anticipating possible new sanctions on Russia because of an apparent impasse in negotiations with Ukraine. The Energy Information Administration (EIA) will release its weekly crude oil inventory report today. The American Petroleum Institute (API) reported a 4.2 million barrel decline in stocks for the latest week just yesterday.  

Euro futures (/6EM5) gained about 0.5% today after the dollar gave away gains following the court decision on tariffs. Rate traders are only pricing in about 40 basis points of Fed interest rate cuts through the end of the year. Meanwhile, Europe has advanced some defense spending packages, which will likely provide a boost to the European economy.  

Christopher Vecchio, CFA, tastylive’s head of futures and forex, has been trading for nearly 20 years. He has consulted with multinational firms on FX hedging and lectured at Duke Law School on FX derivatives. Vecchio searches for high-convexity opportunities at the crossroads of macroeconomics and global politics. He hosts Futures Power Hour Monday-Friday and Let Me Explain on Tuesdays, and co-hosts Overtime, Monday-Thursday. @cvecchiofx
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