GLOBAL MARKETS-Stocks rise, dollar pares gains as markets grapple with US trade ruling

By Chibuike Oguh

NEW YORK, May 29 (Reuters) - Global stocks rose while the U.S. dollar weakened after giving up earlier gains against major peers on Thursday as markets digested the surprise ruling of a trade court that blocked President Donald Trump's so-called "Liberation Day" tariffs.

The U.S. Court of International Trade issued a ruling late on Wednesday that Trump overstepped his authority by imposing across-the-board duties on imports from trading partners.

The decision triggered a court battle that would likely weigh on markets, after the Trump administration swiftly appealed the ruling and appeared poised to fight up to the Supreme Court if needed.

On Wall Street, all three indexes were trading higher after losing ground in the previous session, indicating that markets largely view the decision in a positive light. Nvidia .NVDA.O was up 4% after reporting earnings that beat expectations after markets closed on Wednesday.

The Dow Jones Industrial Average .DJI rose 0.11% to 42,146.94, the S&P 500 .SPX rose 0.32% to 5,907.51 and the Nasdaq Composite .IXIC rose 0.48% to 19,192.11.

Europe's STOXX 600 index .STOXX was down 0.13%, after rising earlier in the session. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS closed up 0.77% overnight.

MSCI's gauge of stocks across the globe .MIWD00000PUS rose 0.42% to 880.05.

"The court striking down Trump's tariffs is more than just a speed bump," said Brian Jacobsen, chief economist at Annex Wealth Management in Wisconsin. "While President Trump can appeal the ruling or try to side-step it, those options are limited and may end up giving the same result. Stock markets like the ruling."

The U.S. dollar had initially risen against safe-haven currencies following news of the court decision, but it has since pared those gains.

Data showed that labor market conditions continue to ease, as the number of Americans seeking unemployment benefits increased more than expected last week.

The dollar weakened 0.35% to 144.31 against the Japanese yen JPY=EBS and was down 0.42% to 0.824 against the Swiss franc CHF=EBS. The euro EUR=EBS was up 0.56% at $1.1355.

The dollar index =USD, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.95% to 99.44.

U.S. Treasury yields, which have been under pressure with investors unnerved by Trump's hefty tax and spend bill, initially rose on Thursday but retreated.

The yield on benchmark U.S. 10-year notes US10YT=RR fell 3.1 basis points to 4.448%. The 30-year bond US30YT=RR yield fell 2.6 basis points to 4.9521%.

"Bond markets might not like it quite as much. Although the tariffs couldn't technically count in the scoring of the budget bill, bond investors were still counting the revenue," Jacobsen said.

Oil prices fell, retreating from earlier gains, after the International Energy Agency's director warned of weaker demand in China and as markets eyed possible U.S. sanctions on Russian crude flows.

Brent crude futures LCOc1 dropped 1.53% to $64.91 a barrel. U.S. West Texas Intermediate crude CLc1 fell 1.89% to $60.67 a barrel.

Gold prices rose in volatile trading partly aided by the softer jobs data. Spot gold XAU= rose 0.74% to $3,313.77 an ounce. U.S. gold futures GCc1 rose 0.49% to $3,311.10 an ounce.

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