Markets start the day under pressure due to trade concerns

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Published Date 7/11/2025

Stock indexes lower this morning. The President announced a 35% tariff on Canadian imports beginning August 1st, citing fentanyl as the reason, adding if Canada retaliates higher tariffs will come.

Starting August 1st the President signaled plans to impose broad-based tariffs of 15% to 20% on most other trading partners, up from the current 10% rate. Earlier in the week, he also unveiled a 50% tariff on imports from Brazil and similar duties on copper, while sending formal notices to several other key trading partners—further escalating the administration’s trade offensive.

The DJIA down 268 points at 8:30 am ET, 10 year note yield 4.39% +4 bps. MBS prices started the day -11 b bps.

Tracking the idea of possible rate cuts from the Fed is driven by employment and inflation reports. The current take, no cut at the FOMC meeting on July 30th but two cuts by the end of this year; the target can change as early as next Tuesday when June CPI is reported. Early estimates for the core CPI month/month an increase to 0.3% up from 0.1% in May, if that turns out to be the case it would be the largest month/month increase since January. Powell continues to fret that the tariffs will set off inflation and slow the employment gains.

There isn’t any economic data today, Treasury will report the June balance at 2 pm, expected at -$50.0B down from -$316B in May.

At 9:30 am the DJIA opened -227, S&P -51, S&P -24. 10 year at 9:30 am 440% +5 bps. MBS prices at 9:30 am -16 bps from yesterday’s close and -17 bps from 9:30 am yesterday.

Source: TBWS

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