After the TACO Trade cynicism, the market is in for another weary sigh. A federal appeals court decided to temporarily pause a ruling that blocked President Trump’s global tariffs, keeping the policy in limbo as legal proceedings continue. The ruling grants POTUS 10 days to reverse course, a decision he swiftly appealed. The U.S. Court of Appeals for the Federal Circuit issued a stay on Thursday, allowing the tariffs to remain under consideration pending further review. Trump has lashed out at the trade court and its judges, expressing hope that the Supreme Court will ultimately reverse the block while insisting the tariffs will generate trillions of dollars for the U.S. economy. The next hearing is scheduled for June 5, with expectations that the case will escalate to the Supreme Court for a final decision. Meanwhile, the White House has signalled it may bypass court losses by implementing the tariffs through alternative mechanisms.

EQUITY

Investors reacted to a U.S. appeals court decision to reinstate President Trump’s tariffs, reversing a prior ruling that had blocked them. Nikkei fell 1.22% after the fact, compounded with a stronger yen, while Hong Kong’s Hang Seng dropped 1.6%, with Apple suppliers hit hard by the tariff reversal. Stocks in the U.S. barely move, although Nvidia’s earnings made it the most valuable company. Not all tech stocks were green, as HP turned red after lowering profit guidance.

GOLD

Gold prices were volatile, dipping and climbing to close at $3,317.62 on Thursday, rebounding after the dollar retraced after a U.S. court blocked most of Trump's tariffs, though gold pulled back on Friday during Asian trade after the court reversal ruling. The ruling dims gold's safe-haven appeal, set for a weekly loss of over 1% as investors await the U.S. PCE inflation report.

OIL

Oil prices declined around 1.5% each, weighed down by an economic contraction in early 2025, coupled with China's weak domestic usage, with local refineries turning to the international market. A US court ruling offered optimism for the demand outlook, but this was quickly offset by rising production from OPEC+ and non-OPEC sources.

CURRENCY

The dollar index struggled to maintain above 100, weighed down by trade tensions and mixed economic data. The upcoming PCE inflation report, the Fed’s preferred measure, is expected to move markets and provide clues to the Fed's next move. Japan's yen bond market struggles as the Bank of Japan's reduced bond purchases, rising inflation, and fiscal concerns over high debt drive up yields and erode demand.