US stock markets climbed Thursday after a federal court ruled that President Donald Trump overstepped his authority in imposing sweeping tariffs under emergency powers, providing relief to investors rattled by months of trade uncertainty. Strong earnings from chipmaker Nvidia further buoyed tech stocks, helping the Nasdaq lead gains.Wall Street opened higher, with the S&P 500 rising 0.8 per cent in early trading. The Nasdaq Composite jumped 1.4 per cent, led by gains in technology stocks after chipmaker Nvidia once again topped quarterly earnings expectations. The Dow Jones Industrial Average was up 64 points, or 0.1 per cent.The gains were even stronger in Asia, where markets reacted for the first time to the late-Wednesday ruling by the US Court of International Trade in New York. Japan’s Nikkei 225 index surged 1.9 per cent to 38,432.98, while South Korea’s Kospi also gained 1.9 per cent. Hong Kong’s Hang Seng rose 1.3 per cent, and Shanghai’s Composite Index added 0.7 per cent.Futures trading earlier in the day had already hinted at the bounce: S&P 500 futures rose 1 per cent, Nasdaq futures were up 1.5 per cent, and Dow futures climbed 0.4 per cent.The court ruled that the 1977 International Emergency Economic Powers Act (IEEPA), cited by Trump as the legal basis for sweeping import tariffs, does not grant the president such authority. The White House immediately appealed the decision, and it remains unclear whether the administration will comply during the legal process.“The ruling was, at the least, ‘a brief respite before the next thunderclap,’” said Stephen Innes of SPI Asset Management. “Just when traders thought they’d seen every twist in the tariff saga, the gavel dropped like a lightning bolt over the Pacific.”Despite the uncertainty over future appeals, investors were encouraged by the prospect of easing trade tensions. Nvidia’s strong results added fuel to the rally, with shares up 6 per cent in off-hours trading. Broadcom and Advanced Micro Devices gained 3.1 per cent each, Super Micro Computer jumped 4 per cent, and Apple and Amazon rose about 2.5 per cent.Nvidia, a leading chipmaker and AI giant, has faced sharp swings due to the tariff dispute, which had largely neutralized its stock price gains earlier this year.In Europe, Germany’s DAX gained 0.4 per cent, France’s CAC 40 jumped 0.8 per cent, and the UK’s FTSE 100 was flat at midday.Elsewhere in Asia, Australia’s S&P/ASX 200 rose 0.2 per cent to 8,409.80. South Korea’s gains were also helped by a 25 basis point interest rate cut by the Bank of Korea, bringing its key rate to 2.5 per cent to support the economy.However, not all Asian markets participated in the rally: Taiwan’s Taiex edged down 0.1 per cent, and India’s Sensex fell 0.2 per cent.In currencies, the dollar spiked briefly against the yen before settling at 144.98 yen from 144.87 yen. The euro slipped slightly to $1.1280 from $1.1292.Meanwhile, the US economy shrank at an annualized rate of 0.2 per cent in the first quarter of 2025, according to a revised Commerce Department estimate released Thursday. It marks the first quarterly contraction in three years, with the trade war weighing heavily on growth.The GDP decline was largely due to a 42.6 per cent surge in imports as companies rushed to stockpile foreign goods ahead of expected tariffs. That import spike, the biggest since Q3 2020, subtracted over five percentage points from GDP. Consumer spending also weakened sharply.The previous quarter saw 2.4 per cent growth. Analysts expect the drag from imports to ease in the April–June quarter, allowing GDP to rebound. The final GDP estimate for Q1 is due on June 26.US benchmark crude added 32 cents to $62.16 a barrel, and Brent crude rose 26 cents to $64.58. The 10-year Treasury yield edged up to 4.52 per cent from 4.47 per cent late Wednesday.