By Krystal Hur
U.S. stocks emerged from a battery of new tariff threats to end the week as it began: close to record highs.
Major stock indexes posted muted losses on Friday after Trump said Thursday evening that the U.S. would impose a 35% tariff on Canadian imports, up from the current 25% rate. On Wednesday night, the president announced a 50% levy on Brazilian goods. And earlier in the week, he sent letters to Japan and South Korea, among other countries, outlining higher tariffs slated to take effect Aug. 1 unless they reach trade deals with the U.S.
The president's flurry of Truth Social posts may have kept America's trading partners on their toes, but they didn't seem to faze stock investors much. Both the S&P 500 and Nasdaq composite hit fresh closing highs as recently as Thursday.
Behind the market's calm: The economy has remained resilient against tariffs already in place, and investors expect that the president will walk back his threats or strike trade deals before the tariffs can incur serious damage to the economy and markets, analysts say. And Trump's extension of the deadline for "reciprocal" tariffs to Aug. 1 has left investors in wait-and-see mode again.
Plus, there have been little signs of tariff-related impacts on inflation. Data in recent months shows that inflation is continuing to trend lower, despite businesses warning that they are raising prices in response to Trump's levies.
"We all are waiting for the ultimate impact of what this is actually going to be once the tariffs are enacted," said Allen Bond, managing director at Jensen Investment Management.
On Friday, the Dow Jones Industrial Average fell 0.6%, or 279 points. The S&P 500 slipped 0.3% and the Nasdaq composite lost 0.2%.
Weekly moves were similarly subdued. The Dow and S&P 500 declined 1% and 0.3%, respectively. The tech-heavy Nasdaq fell less than 0.1%.
Investors will get more clues on the state of inflation from the consumer-price index due Tuesday. Big banks including JPMorgan Chase and Wells Fargo kick off the second-quarter earnings season the same day.
Also cheering up investors this week: Some corporate executives have offered brighter outlooks for the coming months. Delta Air Lines said travel demand has stabilized and forecast a stronger third quarter than analysts expected. Levi Strauss raised its fiscal-year guidance and said shoppers are still spending.
Bond yields climbed Friday. The yield on the 10-year Treasury note rose to 4.42%, up from 4.35% Thursday.
The price of bitcoin touched a fresh record high of $118,861.52 on Friday before paring back.
Copper futures rose 9.1%, their largest weekly percentage gain since 2022, after Trump's announcement of a 50% tariff on the metal sent prices to record highs Tuesday.
Some analysts fret that investors are overly blasé, warning that the effect of levies could begin showing up later this year, and potentially derail the economy's resilience and send inflation higher. The tariff whiplash is also likely to continue, they say.
"The risk is the same as it was in the first administration -- that the president misjudges where that fine line is between pushing too far and causing an economic contraction or a stock-market decline," said Brent Schutte, chief investment officer at Northwestern Mutual Wealth Management.
Another reason for concern: Stocks hardly look cheap. Schutte says his firm owns international stocks, as well as shares of small- and midcap companies, that are less expensive than the tech heavyweights in the S&P 500 that drove the dizzying artificial-intelligence rally.
Companies in the S&P 500 recently traded at 22 times their expected earnings over the next 12 months. Firms in the S&P Small Cap 600 recently traded at 15.8 times.
Elsewhere, shares of Kraft Heinz rose 2.5% on Friday after The Wall Street Journal reported that the company is planning to spin off a large chunk of its grocery business.
Write to Krystal Hur at krystal.hur@wsj.com
(END) Dow Jones Newswires
July 11, 2025 18:31 ET (22:31 GMT)
Copyright (c) 2025 Dow Jones & Company, Inc.
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