Published by SmallCap Network Editorial Team – July 10, 2025

Wall Street was rattled today after former President Donald Trump reiterated his plans to impose major new tariffs on Chinese goods if re-elected — a move that immediately sent shockwaves across the major indices.

The Dow Jones Industrial Average dropped over 450 points, while the S&P 500 slid more than 1.3%, as traders priced in the potential for renewed trade war tensions and global supply chain disruptions.

Tariff Talk Reignites Fears of Economic Deceleration

Investors are reacting to Trump’s call for an automatic 60% tariff on Chinese imports, echoing policies from his first term that triggered volatility, inflation spikes, and corporate uncertainty. Tech and industrials led the downside, while defensive sectors remained mostly flat.

“This isn’t just rhetoric anymore,” said one SCN analyst. “With Trump climbing in the polls, the market is beginning to take these policy threats seriously.”

Small Caps Under Pressure – But a Bounce May Be Building

The Russell 2000, often seen as the barometer for U.S.-focused small cap stocks, dropped 1.9% intraday. While small caps tend to be less exposed to international tariffs, they’re often hit hardest by rising interest rates and macroeconomic uncertainty — both of which are now back in focus.

However, with valuations still compressed and earnings season approaching, some contrarian traders are already looking for oversold rebound setups.

What to Watch:

• Industrials and Logistics: Small cap shipping, rail, and manufacturing stocks could experience short-term pressure.

• U.S.-centric Growth Plays: Companies with minimal international exposure may benefit from a return to “America First” trade positioning.

• Energy & Defense: These sectors often benefit from political volatility and may see inflows in the short term.

SCN Takeaway:

Markets hate uncertainty — and tariff threats from Trump are starting to look real again. But where large caps falter, small caps can offer nimble, high-upside trades. Our team is watching several tickers that could thrive amid domestic-focused policy shifts.

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