Stock Market Today: Stocks Drop on Trump's EU Tariff Threats
The White House said alcohol imports from the European Union could soon face tariffs of 200%.
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Stocks opened lower Thursday, with losses accelerating as the session wore on. By the close, all three main indexes were deep in negative territory as tariff headlines once again sent market participants scrambling.
Another encouraging reading on inflation couldn't save stocks today. Indeed, an early morning release from the Bureau of Labor Statistics showed the Producer Price Index, which measures wholesale prices, was flat month over month in February, though January PPI was upwardly revised to 0.6% from the initial reading of 0.4%. Year over year, headline PPI was up 3.2% vs 3.7% in January.
Core PPI, which excludes volatile food and energy costs, fell 0.1% from January to February and 3.3% compared to the year prior. The results beat economists' expectations across the board.
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The data are "more good news for the Fed," says Chris Larkin, managing director of Trading and Investing at E*TRADE from Morgan Stanley. "A downside surprise in the latest PPI data builds on yesterday's milder-than-expected CPI."
However, Larkin adds that "the question for markets is whether good news on the inflation front can make itself heard above the noise of the ever-changing tariff story."
On Thursday, the answer to that question was a resounding "no." At the end of the trading day, the Dow Jones Industrial Average was down 1.3% at 40,813, the S&P 500 had slumped 1.4% to 5,521 – closing in correction territory – and the Nasdaq Composite was off 2.0% at 17,303.
Trump's retaliatory tariffs target wine
Tariff headlines have sparked extreme volatility in the stock market recently.
"Tariff uncertainty has captured most of the blame for the selling pressure [in the market] and is exacerbating economic growth concerns," says Adam Turnquist, chief technical strategist for LPL Financial.
"In only a few weeks, the broader market has gone from record highs to correction territory, marked by a drawdown of at least 10% from a new high," Turnquist adds.
And that trend continued Thursday after President Donald Trump threatened 200% tariffs on wine and alcohol coming from the European Union after the 27-nation bloc implemented 50% tariffs on several U.S. imports on Wednesday.
"The latest boxing round of tariffs featured yet another heightening of tensions, but this time, including a fair amount of booze," says José Torres, senior economist at Interactive Brokers.
This is weighing on stocks "as traders focus on the possibility of cost pressures to firm up later in the year if the implementation of duties is heavy and widespread," he adds.
Wall Street cheers Intel's new CEO
In single-stock news, Intel (INTC) surged 14.6% after the embattled chipmaker said it tapped Lip-Bu Tan as its next CEO. The industry veteran previously served as CEO for Cadence Design Systems (CDNS) and was an Intel board member for two decades before stepping down last August.
Stifel analyst Ruben Roy believes Tan "is uniquely qualified to attempt a reboot of INTC" and sees this as "a longer-term positive." However, Roy notes that Intel's turnaround will be lengthy as it "realigns with the evolving AI-centric opportunity set that continues to accelerate."
Adobe slumps after earnings
Elsewhere in the tech space, Adobe (ADBE) plummeted 13.9% after the Creative Cloud parent reported earnings.
While Adobe beat on the top- and bottom-line for its fiscal first quarter and gave solid fiscal Q2 guidance, its net new annual recurring revenue of roughly $410 million landed at the low end of expectations, says UBS Global Research analyst Karl Keirstead.
He adds that artificial intelligence revenue of $125 million, which equated to 0.7% of ARR, "felt light."
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