Wall Street Volatility: Tariff Tensions Offset Positive Economic Signs/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ Stock market remains volatile as Trump’s trade war intensifies despite positive economic data. S&P 500, Dow, and Nasdaq fluctuate as investors react to Trump’s proposed 200% tariff on European wine and champagne. Wholesale inflation slowed last month, but concerns over stagflation and economic uncertainty remain. Tech stocks, including Tesla and Palantir, take a hit, while Intel surges 16.4% after naming a new CEO.
Markets Shake as Trump’s Tariff Threats Offset Cooling Inflation – Quick Looks
- Stocks swing wildly: The S&P 500, Dow, and Nasdaq see sharp fluctuations as tariff fears clash with economic optimism.
- Trump targets European imports: The President threatens 200% tariffs on European wines and champagne, retaliating against EU duties on U.S. whiskey.
- Inflation shows signs of easing: Wholesale prices remained flat in February, following better-than-expected consumer inflation data.
- Investors fear stagflation: The risk of sluggish growth with persistent inflation looms amid Trump’s unpredictable trade policies.
- AI stocks struggle: Companies like Palantir (-3.2%) and Constellation Energy (-1.8%) decline, while Nvidia edges up 1.2%.
- Tesla tumbles further: After a brief rally, Tesla drops 3.2%, now down over 40% in 2025.
- Intel surges: The company rallies 16.4% after naming Lip-Bu Tan as CEO to steer its semiconductor turnaround.
- Treasury yields rise: The 10-year Treasury yield climbs to 4.34%, reflecting ongoing economic uncertainty.
Wall Street Volatility: Tariff Tensions Offset Positive Economic Signs
Deep Look: Trump’s Trade War Fuels Market Volatility
Stocks Fluctuate as Tariff Battles Shake Investor Confidence
The U.S. stock market remains turbulent, as investors grapple with Trump’s latest trade threats.
- The S&P 500 fell 0.3% in early trading after swinging wildly throughout the week.
- The Dow Jones Industrial Average dropped 54 points but fluctuated between a 230-point loss and a slight gain.
- The Nasdaq dipped 0.5%, weighed down by AI stocks and Tesla’s ongoing struggles.
What’s driving the volatility?
- Trump’s trade war escalation – The President vowed to impose a 200% tariff on European wine, champagne, and spirits if the EU proceeds with its planned 50% tariff on U.S. whiskey.
- Fears of economic stagnation – Businesses and consumers are losing confidence, worried about higher costs from tariffs and unpredictable policies.
- Mixed economic signals – While inflation appears to be cooling, experts warn that Trump’s trade war could push prices back up.
Trump’s Tariff War: What’s Happening?
- New EU tariffs on U.S. whiskey: In response to Trump’s 25% steel and aluminum tariffs, the European Union announced countermeasures on U.S. whiskey and other goods.
- Trump’s retaliation: The President threatened a massive 200% tariff on European alcoholic imports, warning the EU to roll back its trade measures.
- Uncertain economic outlook: While some sectors may benefit from protectionist policies, many fear rising costs and disrupted global trade.
Good News on Inflation, But Risks Remain
Despite the trade war drama, economic reports brought some relief:
- Wholesale inflation remained flat in February, a positive sign for cooling price pressures.
- Consumer price inflation also eased, with the CPI rising just 2.8% year-over-year, down from 3% in January.
- Unemployment claims fell, signaling that the job market remains resilient.
What’s the concern?
- Stagflation fears: If inflation stays high while growth slows, the economy could enter a difficult period with few policy solutions.
- Tariffs could reverse progress: While inflation appears to be easing, new tariffs on imports could push prices higher.
Market Movers: Winners & Losers
Stocks That Struggled
- Tesla (-3.2%) – After brief gains earlier this week, Tesla’s stock dropped again and remains down over 40% this year.
- Palantir (-3.2%) & Constellation Energy (-1.8%) – AI-related stocks continued their recent slump as investors question high valuations.
- American Eagle Outfitters (-1%) – The retailer warned of weak demand and poor weather affecting sales, despite a strong earnings report.
Stocks That Gained
- Intel (+16.4%) – The company soared after naming Lip-Bu Tan as its new CEO, hoping to turn around its struggling semiconductor business.
- Nvidia (+1.2%) – Despite recent losses, the AI chipmaker rebounded slightly, though it remains under pressure from market uncertainty.
Bond Market & Global Stocks
- 10-Year Treasury Yield Rises – Yields climbed to 4.34%, reflecting ongoing market uncertainty.
- Global Markets Mixed – European and Asian markets saw modest declines, following Wall Street’s choppy performance.
What’s Next for the Markets?
- Will Trump follow through on his tariff threats? Investors are waiting for updates on trade negotiations.
- Can inflation stay under control? Economic data is encouraging, but new tariffs could reignite price pressures.
- Will tech stocks stabilize? AI and EV stocks are highly volatile, with uncertainty about future growth.
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