Wall Street Flirt with New Highs Despite Looming Tariff-Driven Inflation and Earnings Compression

Barry Adams
11 Aug, 2025
New York City

Wall Street indexes hovered near record highs as investors overlooked tariff-driven increases in costs for corporations. 

The S&P 500 index increased 0.1%, and the Nasdaq Composite advanced 0.3%, as investors awaited the release of the consumer price inflation report on Tuesday and the producer price inflation report on Thursday.

July's consumer price inflation is likely to accelerate to a five-month high of 2.8%, and core inflation is to reach 3.0%. Moreover, producer price inflation is expected to accelerate, as businesses and importers pass on higher tariffs to consumers. 

On the earnings front, investors are looking forward to the release of quarterly results from Applied Materials, Cisco Systems, Deere & Company, Advance Auto Parts, Brinker International, and McGraw Hill. 

Friday marked the start of Trump's tariffs, and investors are increasingly worried that goods price inflation will elevate inflation, forcing the Fed to keep rates higher for longer. 

Despite the repeated and forceful claims by Donald Trump about his success in striking trade deals and its positive impact on the U.S. economy, investors remain skeptical about the largest increase in import taxes in a century on American families and businesses. 

Moreover, the Trump administration has struggled to finalize even one agreement, and most announced deals are "trade frameworks" with few verifiable details.

U.S. Treasury Secretary Scott Bessant agreed in an interview with MSNBC Morning Joe show that tariffs are paid by the "U.S. importers," and they could be passed on to customers. 

This is the first public admission by the Trump administration official that tariffs are import taxes and ultimately hurt the American families and businesses. 

The Republican Party, which touts itself as a party friendly to businesses, free trade, and low taxes, has managed to increase taxes for all Americans, kill thousands of small businesses, and shrink global free trade.

Moreover, at least 200,000 small businesses are likely to fold in 2025 following the Trump administration's erratic trade policy and sharp escalation in tariffs on goods from Mexico, China, Canada, Japan, and Brazil.

While Donald Trump is touting that high tariffs will bring more manufacturing jobs, at least 415,000 jobs are unfilled in the sector as of June, according to a report by the National Association of Manufacturers. 

 

U.S. Stock Movers 

AMD and Nvidia declined after the two companies agreed to sell part of their chip sales to the U.S. Treasury in exchange for an export license to China.

AMD and Nvidia agreed to pay a 15% export fee for the sale of MI 308 chips and H2O chips, respectively. 

Advanced Micro Devices decreased 1.7% to $172.76, and Nvidia dropped 0.6% to $181.67.