Morning Note: USD Jumps on Tariff Block; NVIDIA's Strong Q1; Costco Earnings Due

Trump’s Tariffs Blocked, USD Soars

The U.S. dollar surged during Thursday’s Asian trading session after a major legal setback for former President Donald Trump’s trade policy. A Manhattan federal court blocked Trump's attempt to implement the so-called Liberation Day import tariffs, sending the U.S. dollar higher against key currencies, including the euro, yen, and Swiss franc. The ruling emphasised that only Congress has the constitutional authority to regulate international trade, limiting the president’s ability to impose tariffs under emergency powers.

In its decision, the three-judge panel clarified that the court was not evaluating the wisdom or effectiveness of using tariffs as a negotiation tool, but rather ruling based on legal authority. Shortly after the ruling, the Trump administration filed an appeal, challenging the court’s jurisdiction. The case, originating in the Court of International Trade, may now progress to the U.S. Court of Appeals for the Federal Circuit and potentially reach the Supreme Court.

(U.S Dollar Index Daily Chart, Source: Trading View)
From a technical analysis perspective, the U.S. Dollar Index has been in a bearish trend since mid-January 2025, as evidenced by a series of lower highs and lower lows. However, it has recently rebounded from the support zone between 98.40 and 98.70 and is currently retesting the swap zone at 99.85 to 100.15. If the index can firmly close above this zone, it may potentially continue its upward movement to retest the resistance area of 101.30 - 101.60.

NVIDIA Beats on Earnings, Eyes China Curbs

NVIDIA Corp reported strong Q1 earnings, with adjusted earnings per share coming in at $0.96, well above last year’s $0.61. Revenue surged 69.2% year-over-year to $44.06 billion, surpassing analyst forecasts of $43.31 billion. Net income for the quarter reached $18.78 billion, and the company’s reported (GAAP) EPS was $0.76.

Despite the strong performance, NVIDIA's outlook for Q2 fell short of market expectations. The company warned of an $8 billion impact on future sales due to tightened U.S. export restrictions on its AI chips to China. However, the Q1 financial hit from these restrictions was lower than anticipated, about $1 billion less, due to the reuse of materials from its H20 chip production.

(Nvidia Daily Share Price Chart, Source: Trading View)
From a technical analysis perspective, the Nvidia share price has been moving in a bullish trend after rebounding from the support zone of 91 – 94 since the beginning of April 2025, as indicated by the higher highs and higher lows. Recently, it broke above the swap zone of 120 – 123, which indicates the bullish momentum persists. Therefore, the price may potentially continue moving upward to retest the resistance zone of 147–150.

Investors Await Costco Earnings Report

Costco Wholesale Corporation (COST) is set to release its fiscal Q3 2025 earnings after the market closes today. Analysts estimate third-quarter revenue to reach $63.1 billion, reflecting a 7.9% year-over-year increase. The company's consistent growth is attributed largely to its value-driven approach, competitive pricing, and successful membership-based business model. By providing quality goods at discounted prices, Costco continues to attract budget-conscious consumers looking for both savings and convenience.

Key drivers of Costco’s ongoing success include its ability to leverage bulk purchasing and maintain efficient inventory control. These operational strengths enable the company to offer low prices while sustaining high store traffic and strong sales volumes. Together, these elements are expected to support another solid quarterly performance.

(Costco Daily Share Price Chart, Source: Trading View)
From a technical analysis perspective, the Costco share price has been moving in a bullish trend after rebounded from the support zone of 91 – 94 since beginning of April 2025, as indicated by the higher highs and higher lows. Recently, it broke above the swap zone of 120 – 123, which indicates the bullish momentum remains strong. The price may potentially continue its upward movement to retest the resistance zone of 147 – 150.