Stocks take another tumble as trade-war fears intensify
In This Story
Stocks took another tumble on Thursday as President Donald Trump escalated the trade war with 200% tariffs on European alcoholic beverages, swamping a better-than-expected wholesale inflation report that showed prices continuing to slow.
The Nasdaq Composite fell 1.4% as of about 12:45 p.m., the S&P 500 declined 1%, and the Dow Jones Industrial Average lost 438 points, or about 1.1%. Tesla (TSLA-5.04%) stock’s recent rebound may have ended, as it fell 4.4%.
“We aren’t too surprised about the volatility of this magnitude,” said Mike Reynolds, Glenmede’s VP for investment strategy. “It’s not just the tariffs themselves that have been proposed, it’s that uncertainty that there could be additional levies just around the corner.”
The Trump administration may deal another blow next month when it imposes “reciprocal” tariffs, as these are likely to fall on countries including Vietnam, India, and Indonesia that are alternatives to China as makers of low-cost, goods, Reynolds told Quartz.
And any benefit from better-than-expected inflation reports this week could be eroded with the coming release of the February Personal Consumption Expenditures report — which Bank of America (BAC-1.25%) said may show that progress has stalled on core PCE, the Federal Reserve’s favorite price measure.
European wine and spirits companies’ shares fell on today’s tweet from Trump. The American depositary receipts of Pernod Ricard and Remy Cointreau (REMYY-4.54%) both declined about 4% and those of Davide Campari-Milano dropped almost 5%. LVMH’s (LVMUY-2.41%) ADRs slid about 1.5%, and Heineken’s (HEINY-2.02%) 1.9%. AB Inbev (BUD-1.36%) also fell.
The EU recently hiked its duties on imports of American whiskey to 50% in response to new U.S. tariffs on iron and steel from the bloc, which in turn drew today’s announcement from Trump.
If enacted, Trump’s new tariffs could result in price hikes for U.S. consumers at liquor and grocery stores and put pressure on the restaurant business. Most restaurateurs make 50% to 60% of their profit on wine and drinks, and their margins will be squeezed by higher prices.
Also falling today: Zealand Pharma, Roche (RHHBY-2.07%), and Hims & Hers (HIMS-7.87%), which are all involved in the development or sale of weight-loss drugs. Going the other way, Intel (INTC+13.85%) shares jumped about 15% on the appointment of a new CEO and Dollar General (DG+3.71%) advanced about 3.9% after earnings.
