Wall Street’s slide resumed on Thursday, another anxiety-induced drop that left the S&P 500 on the verge of closing in a “correction” — a symbolic marker of the speed at which investors have fled the stock market in recent weeks.
Traders, economists and business leaders have been grappling with a rapidly shifting economic landscape as President Trump has imposed and threatened new tariffs on imports that could upend global trade and undermine complex supply chains for big companies.
On Thursday, Mr. Trump threatened to impose 200 percent tariffs on European wine and champagne, one day after the European Union announced retaliatory tariffs on imports of U.S. whiskey and several other American products. The president has already added tariffs on steel and aluminum imports, and a wide swath of products from China.
The S&P 500 fell more than 1.2 percent on Thursday, and was nearly 10 percent below its Feb. 19 peak. A drop of that scale from a record is called a correction, which on Wall Street serves as a marker of how pointedly pessimistic investors have become.
The technology-heavy Nasdaq Composite index fell 1.7 percent, while the Russell 2000 index of smaller companies, which tend to be more exposed to the ebb and flow of the economy, was 1.8 percent lower. Both benchmarks are already in correction territory.
The Trump administration has downplayed the severity of recent swings, saying that it is focused instead on the economy’s long-term outlook. “I’m not concerned about a little bit of volatility over three weeks,” Treasury Secretary Scott Bessent told CNBC on Thursday, predicting that markets would rise in the long run.
The constantly moving goal posts have left investors so rattled that even recent good news about the economy hasn’t had a calming effect. On Thursday, a report on weekly unemployment claims came in lower than expected. On Wednesday, a better-than-expected reading of the Consumer Price Index had briefly helped bolster stocks.
Investors are worried that tariffs, once in full effect, will push prices higher — hurting business and consumers. Mr. Trump’s immigration policies and firings of federal employees through the so-called Department of Government Efficiency are also looming in the backdrop, as is the threat of an impending government shutdown.
“The outlook for inflation depends more on tariffs, deportations and DOGE than the backward-looking data releases right now,” Bill Adams, chief economist for Comerica Bank, said on Thursday.
Airlines and retailers have been warning of pullback among consumers. On Thursday, Dollar General said customer traffic fell in its most recent quarter and predicted continued financial pressure. Delta Air Lines cut its financial forecast this week for the first three months of the year, citing less demand for domestic travel.
The 10-year Treasury yield, which underpins a range of borrowing costs, has been falling sharply since mid-January and ticked down again on Thursday, a sign of concern among bond investors. Oil prices also slipped on Thursday, with Brent crude, the international benchmark, down 1.6 percent to just under $70 a barrel. Gold, a haven, hit a record high.
European stocks were also lower on Thursday, and large alcoholic beverage producers like Remy Cointreau and Pernod Ricard down more than 4 percent. The French luxury conglomerate LVMH, which owns brands including Dom Pérignon, Krug and Veuve Cliquot, fell less than 1 percent.
