Wall Street kicked off Thursday with a wave of optimism as Nvidia surged 5.6% at the opening bell, adding a staggering $180 billion to its market capitalization. The rally, contributed to a broader market upswing, with the Nasdaq Composite leading the charge-up 1.51% to 19,389.392. The Dow Jones Industrial Average and S&P 500 also posted gains, rising 0.22% to 42,190.02 and 0.87% to 5,939.96, respectively. Two major catalysts fueled the market's momentum: a federal court ruling blocking most of US President Donald Trump's tariffs and Nvidia's robust quarterly sales growth of 69%, cementing its status as an AI bellwether.
Nvidia's 5.6% jump translated to a market cap increase of $180 billion, bringing its total valuation to approximately $3.394 trillion. This estimate is derived from the gain: a 5.6% increase equating to $180 billion implies a pre-surge market cap of around $3.214 trillion. The stock's performance far outpaced the Nasdaq's 1.51% rise, underscoring Nvidia's outsized influence on the tech-heavy index.
The surge comes on the heels of Nvidia's latest quarterly earnings, which showcased a 69% sales increase to $44.06 billion, driven by soaring demand for AI infrastructure. CEO Jensen Huang highlighted the "incredibly strong" demand, noting that AI inference token generation–a key metric for AI workloads–had surged tenfold in the past year. Despite missing earnings expectations with adjusted earnings of 81 cents per share (versus 86 cents expected), the sales growth fueled investor enthusiasm. However, Nvidia also faced headwinds from export curbs, missing out on $2.5 billion in sales of its H20 products due to geopolitical restrictions.
This rally marks a significant recovery for Nvidia, which earlier in 2025 suffered a record-breaking $600 billion single-day market cap loss on January 27 after the report on China's DeepSeek spooked markets. This was the largest ever drop for a US company, fueled by the fear that China could manage without relying on the US-giant's advanced processors. That 17% drop, part of a broader sell-off in AI stocks, reflected concerns over AI infrastructure demand and export restrictions on products like the H800 chip. The May 29 rebound signals renewed investor confidence, bolstered by Nvidia's pivotal role in the AI boom and favorable market conditions.
Tariff ruling sparks optimism
A major driver of the day's market gains was a US trade court's decision to block most of President Trump's tariffs, ruling that he had overstepped his authority under the International Emergency Economic Powers Act (IEEPA). The ruling, reported by Reuters, invalidated tariffs imposed since January, providing immediate relief to US companies reliant on imports. The decision led to a surge in the US dollar against the euro, yen, and Swiss franc, while equities in Asia and Wall Street futures also rallied.
For tech companies like Nvidia, which depend on global supply chains for chip production, the tariff relief reduces costs and boosts profitability. A related post from @WeWin_Together at 13:32 UTC, titled "Call Your Tariffs," linked to further details on the ruling, highlighting its significance for the market. However, the ruling does not affect industry-specific tariffs (e.g., on steel or automobiles), and potential appeals could reverse the decision, leaving some uncertainty.
While Nvidia's performance and the tariff ruling dominated headlines, other developments painted a mixed picture of the global economy. @WeWin_Together reported that spot gold rose nearly 1% to $3,320.89 per ounce, reflecting potential investor hedging against inflation or geopolitical uncertainty. This coincided with news of North Korea shipping over 20,000 containers of munitions to Russia to support the Ukraine war–a development that could heighten global tensions. Despite these concerns, the market's upward trajectory suggests investors were more focused on tariff relief and AI-driven growth.
Nvidia's as an AI Bbellwether
Described as an "AI bellwether," Nvidia's performance is a barometer for the health of the AI sector. Its 69% sales growth and $180 billion market cap gain underscore the ongoing AI boom, with cloud service providers like AWS, Google Cloud, and Microsoft Azure increasingly relying on Nvidia's GPUs to meet surging demand. Analysts expect Nvidia's gross margins to reach the mid-70% range later in 2025, which could further propel its stock price if achieved.
Looking ahead, Nvidia's growth trajectory appears strong, but challenges remain. Export curbs continue to impact sales, and geopolitical tensions– could introduce volatility. The tariff ruling's long-term impact hinges on potential appeals, which could reinstate some duties and affect global supply chains.
