Stocks traded mixed as of midday on Thursday after early gains faded, with investors grappling with uncertainty surrounding the future of US trade policy as the Trump administration vowed to appeal a court ruling striking down tariffs.

The S&P 500 and Dow Jones Industrial Average both slipped into negative territory despite a strong start, while the Nasdaq eked out a modest gain.

As of 11:59 a.m. ET, the Dow was down 224 points, or 0.53%, and the S&P 500 dipped 0.16%. The Nasdaq Composite rose 0.07%, buoyed in part by continued strength in Nvidia shares.

Markets had opened higher after a federal court ruled that President Trump’s “reciprocal” tariffs were unlawful, a decision seen by many investors as a potential tailwind for businesses reliant on global supply chains.

The S&P 500 initially moved higher on the ruling, which was viewed as a possible de-escalation of trade tensions and a relief for import-heavy industries.

However, the rally quickly lost steam as questions emerged over whether the White House would appeal the ruling and what it means for future trade policy direction under the Trump administration.

Meanwhile, market volatility ticked higher. The CBOE Volatility Index (VIX) climbed 3.57% to 20, reflecting investor caution. The Russell 2000, which tracks small-cap stocks often more exposed to domestic policy shifts, edged up just 0.01%.

The market seesaw came on the heels of a late-Wednesday decision by the US Court of International Trade, which ruled that Trump lacked the legal authority under the International Emergency Economic Powers Act (IEEPA) of 1977 to enact a sweeping series of trade penalties.

The ruling voids many of the tariffs that triggered global retaliation and unsettled markets over the past several years.

The Trump administration said it plans to appeal the decision. “We are reviewing the court’s opinion and preparing our response,” a White House spokesperson said.

The case now heads to the US Court of Appeals for the Federal Circuit, and potentially the Supreme Court.

The decision represents a significant blow to one of Trump’s most aggressive uses of executive power and throws into disarray recent trade talks with key allies.

It also casts uncertainty over deals already reached with nations such as the UK and China.

In the bond market, US Treasury yields climbed earlier on Thursday, with the 10-year yield jumping above 4.5% — its highest level in over a week.

The court’s ruling covers a wide range of tariffs, including levies on fentanyl-related goods from Canada, Mexico and China, as well as reciprocal tariffs that had impacted nearly every major US trading partner.

However, it leaves intact duties implemented under other laws, including tariffs on autos, steel and aluminum imposed under Section 232 of the Trade Expansion Act of 1962, which permits actions on national-security grounds.

China praised the ruling and urged the US to permanently abandon the tariffs.

“We call on the United States to correct its mistake and lift all unilateral tariffs,” a Chinese Foreign Ministry spokesperson said.

International markets also moved higher, with notable gains in Japanese and South Korean stocks. European shares rose in early trading, while global bond prices fell.

Analysts say the court’s decision could give the US leverage in resetting stalled negotiations — or at least remove a key obstacle.

“We believe one reason bilateral negotiations had stalled was that US trading partners may have anticipated this outcome,” wrote Aniket Shah, a strategist at Jefferies.

Meanwhile, crypto markets rallied as well, with bitcoin rising to around $108,000. Vice President JD Vance reiterated Wednesday that the administration would continue to pursue crypto-friendly policies.