Wall Street Indexes Dropped As Escalating Tariff War Reignite Inflation Worries

Barry Adams
11 Jul, 2025
New York City

Stock market indexes in New York turned lower amid escalating trade tensions and renewed worries about the tariff-linked inflation and its impact on long-term interest rates.

The S&P 500 index decreased 0.2%, and the tech-focused Nasdaq Composite declined 0.1%.

Benchmark indexes in New York faced headwinds after the U.S. president announced a 35% tariff on Canada and blanket tariffs between 15% and 20% on all other trade partners. 

The Trump administration's announcements took investors by surprise, just as investors and businesses were adjusting to the possible rate of 10%. 

The average tariffs paid by the U.S. importers and businesses are near the historic low of 3%, and the sharp escalation in import taxes is likely to fuel inflation.

So far businesses have not passed on higher tariffs to consumers, as companies work off inventories and look for ways to absorb the higher cost of doing business. 

But in the months ahead, businesses will be forced to pass on at least some of the higher import taxes to consumers, which will stoke inflation and force the Federal Reserve to keep higher rates for longer.

Imports from China are facing a tariff rate of 40%, those from Japan are likely to be taxed at 25%, and those from the European Union, Mexico, and Canada are expected to be taxed between 15% and 35%.

 

U.S. Stock Movers 

Levi Strauss & Company jumped 8.6% to $21.43 after the denim maker lifted its sales outlook and reported better-than-expected results in its latest quarter. 

PriceSmart Inc. advanced 7.6% to $110.50, and the membership-based warehouse club operator reported stronger-than-expected revenue and earnings for the latest quarter.

WD-40 Inc edged up 0.4% to $225.75, and the company reported weaker-than-expected revenue, but earnings surpassed expectations.