U.S. stocks fell again Thursday with the S&P 500 officially entering “correction” territory. Economic jitters are on the rise amid President Trump’s trade wars and a possible government shutdown.
Notably, after slapping heavy import taxes on global steel and aluminum imports, he kicked off Thursday threatening to respond to European Union countermeasures with a 200% tariff on imports of EU wines and spirits.
The S&P 500 fell 1.4% — officially considered a correction now as it’s fallen by more than 10% from its February high. It’s lost an estimated $5.3 trillion since then in the index’s first correction since October of 2023, according to the WSJ.
The Nasdaq, which itself entered a correction last week, dropped 2% today. The Dow Jones Industrial Average fell nearly 550 points, or 1.3%. Media and tech stocks were mostly lower with Warner Bros. Discovery down 5% and TKO off 4%. Netflix, Fox and Lionsgate ended down by 3%, Disney by 2%. Giants Alphabet, Apple, Meta and Amazon dropped. Tariffs so far are hitting goods, not services, but there could be ripple effects on entertainment.
Legendary investor Warren Buffett recently called tariffs “an act of war” as President Trump slaps them on countries around the world, including major trading partners Canada, Mexico, China and the EU. When they retaliate, or threaten too, he doubles down. The president said hye believes import taxes will ultimately drive manufacturing back to the U.S.
“Tariffs are actually — we’ve had a lot of experience with them — they’re an act of war, to some degree,” Buffett said in an interview on CBS that aired in early March.
Earlier this month, the Trump administration imposed a 25% import tariff on goods from Mexico and Canada, walking back some. Canada imposed retaliatory tariffs as anti-American sentiment grows. In more on the beverage front, several Canadian provinces have taken U.S. liquor brands off store shelves.
The president said today that, “I am not going to bend at all” on Canada tariffs.
Taxing imports in general will raise prices for U.S. consumers. The lack of clarity and abrupt, near daily, shifts on what the administration actually plans to do is the worst thing for markets as companies can’t plan. Uncertainty is one reason the M&A boom Wall Street had hoped for under Trump has not materialized.
Tariff talk started in earnest last month and has driven stocks lower as it continues to spiral. Trump acknowledged there may be some economic bumps because of it and didn’t rule out a recession, before partly walking that. But the situation is dismaying corporate America, investors and pretty much anyone who owns stocks.
Inflation, which went wild post-Covid, subsided in February, according to data yesterday that gave markets a brief reprieve. But it didn’t last. The impact of tariffs wasn’t reflected yet in the numbers, most believe.
Meanwhile, the Department of Government Efficiency under Elon Musk has slashed so many jobs that some market players fear that could hurt the economy. And a government shutdown looms approaching a Friday deadline as Senate Democrats may block a Republican spending bill.
Media and tech stocks were mostly lower with Warner Bros. Discovery down 5% and Warner Music Group and TKO off 4%. Netflix, Fox and Lionsgate ended down by 3%, Disney by 2%. Exhibitors fell. Giants Alphabet, Apple, Meta and Amazon all fell.
