Asian shares mostly decline as uncertainty grows about what’s next with Trump’s tariffs

TOKYO (AP) — Asian shares were mostly lower Friday as uncertainty grew about what will happen next after a U.S. court blocked many of President Donald Trump’s sweeping tariffs.

Japan’s benchmark Nikkei 225 lost 1.4% in morning trading to 37,892.39. Government data showed Tokyo core inflation, excluding fresh food, accelerating to a higher-than-expected 3.6% in May. Some analysts say that makes it more likely the Bank of Japan will raise interest rates.

Australia’s S&P/ASX 200 was little changed, inching down less than 0.1% to 8,404.50. South Korea’s Kospi declined 0.6% to 2,703.64, ahead of a presidential election set for next week.

Hong Kong’s Hang Seng slipped 1.4% to 23,235.94, while the Shanghai Composite shed 0.3% to 3,353.07.

On Wall Street, the S&P 500 rose 0.4% on Thursday after giving up more than half of an early gain. The Dow Jones Industrial Average added 117 points, or 0.3%, and the Nasdaq composite rose 0.4%.

It’s a downshift after stocks initially leaped nearly 2% in Tokyo and Seoul, where markets had the first chance to react to the ruling late Wednesday by the U.S. Court of International Trade. The court said that the 1977 International Emergency Economic Powers Act that Trump cited for ordering massive increases in taxes on imports from around the world does not authorize the use of tariffs.

The ruling at first raised hopes in financial markets that a hamstrung Trump would not be able to drive the economy into a recession with his tariffs, which had threatened to grind down on global trade and raise prices for consumers already sick of high inflation.

But the tariffs remain in place for now while the White House appeals the ruling, and the ultimate outcome is still uncertain. The court’s ruling also affects only some of Trump’s tariffs, not those on foreign steel, aluminum and autos, which were invoked under a different law.

The Court of Appeals for the Federal Circuit on Thursday allowed the president to temporarily continue collecting the tariffs under the emergency powers law while he appeals the trade court’s decision.

Trump “is still able to impose significant and wide-ranging tariffs over the longer-term through other means,” according to Ulrike Hoffmann-Burchardi, chief investment officer of global equities at UBS Global Wealth Management.

On Wall Street, tech stocks led the way after Nvidia once again topped analysts’ expectations for profit and revenue in the latest quarter.

The chip company has grown into one of the U.S. market’s largest and most influential stocks because of the frenzy around artificial-intelligence technology, and its 3.2% rise was the strongest force by far lifting the S&P 500.

Best Buy fell 7.3% even though it reported a stronger profit than expected. The electronics retailer also cut its forecasted ranges for revenue and profit over the full year on the assumption that “tariffs stay at the current levels,” Chief Financial Officer Matt Bilunas said.

All told, the S&P 500 rose 23.62 points to 5,912.17. The Dow Jones Industrial Average added 117.03 to 42,215.73, and the Nasdaq composite gained 74.93 to 19,175.87.

In the bond market, Treasury yields eased following some mixed reports on the economy. One said that the U.S. economy likely shrunk by less in the first three months of the year than earlier estimated. Another said slightly more U.S. workers applied for unemployment benefits last week than economists expected.

The yield on the 10-year Treasury fell to 4.43% from 4.47% late Wednesday.

In energy trading, benchmark U.S. crude dropped 30 cents to $60.64 a barrel. Brent crude, the international standard, fell 31 cents to $63.84 a barrel.

In currency trading, the U.S. dollar declined to 143.92 Japanese yen from 144.12 yen. The euro cost $1.1355, down from $1.1367.

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AP Business Writer Stan Choe in New York contributed.