The S&P 500 fell 1.2%, the Dow Jones sank about 460 points, and the Nasdaq tumbled 1.7% on Thursday as investors grappled with escalating trade tensions and closely analyzed key economic data.
US stocks resume sell-off
The market took a hit after President Trump threatened to impose a 200% tariff on wine and other alcoholic beverages from the EU, escalating concerns over a potential trade war. This move came in response to the bloc’s newly announced countermeasures, raising fears that further retaliatory actions could disrupt global supply chains and impact corporate earnings.
On the economic front, producer price inflation for February came in below expectations, with the headline figure remaining unchanged and the core rate declining by 0.1% month-over-month. This data mirrored the softer-than-expected CPI report released a day earlier, reinforcing expectations that inflationary pressures may be cooling. Additionally, initial jobless claims stood at 220K, slightly below estimates but largely in line with recent labor market trends, signaling continued resilience in employment despite economic uncertainties.
Sectorial performances
Sector-wise, consumer discretionary and communication services were the worst performers, as concerns over slowing consumer spending and weaker corporate outlooks weighed on sentiment. The technology sector also struggled, dragged down by disappointing earnings guidance from some major players.
On the corporate front, Adobe shares plunged about 13% after the company issued a disappointing revenue outlook, raising concerns about demand in the software industry. Conversely, Intel shares soared more than 15% following the announcement of a new CEO, fueling optimism about potential strategic shifts and future growth opportunities. Meanwhile, other semiconductor stocks showed mixed performances, as investors weighed supply chain disruptions and the impact of ongoing trade disputes.
Investors evaluate next potential Fed decisions
Looking ahead, investors are focused on next week’s Federal Reserve policy meeting, where officials are expected to provide updated economic projections and guidance on the potential path for interest rates. Markets currently anticipate that the Fed will hold rates steady but remain cautious about future policy moves, given the evolving inflation landscape and global trade uncertainty.
