By Gunjan Banerji

Late Thursday, President Trump threatened a 35% levy on Canadian imports, higher than the current 25% rate.

Wall Street shrugged.

Major indexes edged lower in trading Friday, but the losses were small. The S&P 500 is just a hair away from the record hit this month.

So, why aren't the latest headlines spooking investors?

For one, higher tariffs and the ongoing negotiations haven't dented U.S. economic data as much as expected. The jobs market has held up, defying fears of a recession. And inflation hasn't been spiraling.

Some corporate leaders have said things are looking up, encouraging investors ahead of the upcoming earnings season. Delta Air Lines, for example, said travel demand has stabilized and forecast a stronger third quarter than analysts expected. Just months earlier, it said it was too hard to predict performance for the rest of the year because of tariffs. Its shares soared 12% yesterday, before easing back about 2% today.

Some analysts say the megacap stocks that have helped propel the rally this year may not be harmed by higher levies.

"Many of the most heavily-weighted U.S. equities in the S&P 500 are fairly insulated from tariff risk," wrote Ulrike Hoffmann-Burchardi, global head of equities at UBS Global Wealth Management, in a note to clients. "The index can climb to 6500 by June next year." (That's up about 4% from recent levels.)

And of course, it simply hasn't paid off to bet big against the market this year, despite how jarring tariffs have been to many investors. Some Wall Street pros who sold heavily during the April downturn found themselves wading back in during the big rebound that drove the S&P 500 up around 25% from its April low.

Now, even investors who remain wary about higher tariffs are hesitant to pinpoint their impact on the economy and markets.

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(END) Dow Jones Newswires

July 11, 2025 11:46 ET (15:46 GMT)

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