Major Indexes Pull Back After Record Highs
The major U.S. stock indexes opened lower on Friday, July 11, 2025, as investors digested President Donald Trump’s latest round of tariff threats. At the market open, the S&P 500 dropped 0.67% to 6,238, retreating from yesterday’s record close of 6,280. The Dow Jones Industrial Average fell 0.69% to 44,390, while the tech-heavy Nasdaq Composite declined 0.63% to 22,740.
This pullback comes after a strong performance on Thursday when both the S&P 500 and Nasdaq closed at fresh all-time highs, with Nvidia (NVDA) becoming the first public company to reach a $4 trillion market capitalization.
“Today’s market retreat appears to be more about profit-taking rather than panic,” said Deutsche Bank analysts in a morning note. “Despite the tariff headlines, the broader market response suggests investors aren’t yet spooked.”
Trump’s Tariff Announcements Shake Markets
The market decline follows President Trump’s announcement of a sweeping 35% tariff on Canadian goods not covered by the U.S.-Mexico-Canada Agreement, effective August 1. This comes on the heels of earlier tariff threats this week, including a 50% tariff on Brazilian imports and increased levies on copper, pharmaceuticals, and semiconductors.
The VIX fear index, which measures market volatility, rose 7.35% to 16.94 at the opening bell, reflecting increased investor uncertainty.
Global markets also reacted to the tariff news, with the Stoxx Europe 600 falling 1.00%, the UK FTSE 100 down 0.38%, and India’s Nifty 50 declining 0.79%.
Sector and Stock Movements
Despite the broader market decline, several stocks are making significant moves today:
MP Materials (MP) surged over 50% after announcing a $400 million preferred stock purchase agreement with the U.S. Defense Department, highlighting the strategic importance of rare earth minerals.
Airline stocks continued their rally following Delta Air Lines’ (DAL) strong earnings report yesterday. Delta jumped 11% after reinstating its 2025 profit outlook and reporting better-than-expected second-quarter results with earnings of $2.10 per share on revenue of $15.5 billion. CEO Ed Bastian expressed confidence in the business, projecting full-year EPS of $5.25 to $6.25.
Other airlines benefited from Delta’s positive outlook, with United Airlines (UAL) gaining 14.33% and American Airlines (AAL) up 12.72% at the market open.
WK Kellogg (K) shares soared after Italian chocolate maker Ferrero announced plans to acquire the cereal maker for approximately $3 billion, or $23 per share in cash.
Meanwhile, Brazilian stocks faced pressure following Trump’s tariff announcement, with the iShares MSCI Brazil ETF (EWZ) dropping 2%. Brazilian oil giant Petrobras (PBR) fell more than 1%.
Nvidia (NVDA) continued its impressive run, trading up 0.75% at $164.10 after becoming the first company to reach a $4 trillion market cap yesterday.
Upcoming Economic Data and Earnings
Investors are looking ahead to next week’s busy economic calendar, which includes the Consumer Price Index (CPI) report on Tuesday and retail sales data on Thursday. These reports will be closely watched for signs of inflation, especially as markets assess the potential impact of tariffs on consumer prices.
“The uncertainty hasn’t gone away, but investors are eager to see how much of this uncertainty companies feel they have a better understanding of in terms of longer-term plans,” said Chris Fasciano, chief market strategist at Commonwealth Financial Network.
Next week also marks the beginning of the second-quarter earnings season, with major financial institutions including JPMorgan Chase (JPM), Bank of America (BAC), and Goldman Sachs (GS) scheduled to report. Other notable companies reporting include Netflix (NFLX), Johnson & Johnson (JNJ), and 3M (MMM).
Analyst expectations for Q2 earnings have moderated, with S&P 500 companies now expected to show profit growth of 5.8% year-over-year, down from earlier projections of 10.2% growth.
Market Outlook
Despite today’s pullback and ongoing tariff concerns, the S&P 500 has surged 26% since April, reaching all-time highs. This resilience suggests investors are looking beyond short-term uncertainties toward improved fundamentals later this year and into 2026.
“Markets are strong on the assumption Trump will retreat; markets being strong reduces the incentive for Trump to retreat,” noted UBS economist Paul Donovan, highlighting the complex dynamics at play.
While most analysts believe the impact of tariffs will initially be absorbed by corporate margins rather than passed on to consumers, some warn that markets may be underpricing risks. Pantheon Macroeconomics estimated that a 200% tariff on pharmaceuticals could wipe out 4% of Switzerland’s GDP given the country’s significant drug exports.
As the trading day progresses, investors will be watching closely to see if dip-buyers emerge to support the market or if concerns about escalating trade tensions lead to further selling pressure. With earnings season kicking off next week, market participants will be particularly focused on how corporate America is navigating the uncertain trade environment.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.