Good morning. After Nvidia reported a 69 per cent year-over-year increase in quarterly revenue on Wednesday evening, its shares rose more than 3 per cent yesterday. Have a look at a longer-term chart, though: the super-stock of 2022-2024 has been tracking more or less sideways since last summer. While we were all talking about tariffs, deficits and bonds, something has changed in the stock market. Email us if you know what it is: unhedged@ft.com.   

Tariff revenues and the deficit

Investors woke up yesterday morning to a pleasant surprise: a court ruling in the US invalidated Donald Trump’s reciprocal tariffs. The picture got somewhat more complicated as the day wore on. First another court ruled against the president’s tariffs again. Then yet another court allowed the tariffs to remain in place while the cases proceed. On balance, though, it was a bad day for Trump’s tariffs and a decent day for markets. The S&P 500 closed up 0.4 per cent. Treasuries did better. Ten-year yields (which fall as prices rise) finished the day down 6 basis points.

The mildly positive market response makes sense. The large-cap index has already recovered from the “liberation day” shock. And the tariff fight will go on (we recommend you read our colleagues on this point). Uncertainty is still the main story, both on the tariffs and what they will mean for inflation and growth.