Wall Street tumbles 10% below its record for first 'correction' since
2023 on Trump's trade war
[March 14, 2025] By
STAN CHOE
NEW YORK (AP) — Wall Street’s sell-off hit a new low Thursday after
President Donald Trump’s escalating trade war dragged the S&P 500 more
than 10% below its record, which was set just last month.
A 10% drop is a big enough deal that professional investors have a name
for it — a “correction” — and the S&P 500’s 1.4% slide on Thursday sent
the index to its first since 2023. The losses came after Trump upped the
stakes in his trade war by threatening huge taxes on European wines and
alcohol. Not even a double-shot of good news on the U.S. economy could
stop the bleeding.
The Dow Jones Industrial Average dropped 537 points, or 1.3% Thursday,
and the Nasdaq composite fell 2%.
The dizzying, battering swings for stocks have been coming not just day
to day but also hour to hour, and the Dow hurtled between a slight gain
and a drop of 689 points on Thursday.
The turbulence is a result of uncertainty about how much pain Trump will
let the economy endure through tariffs and other policies in order to
reshape the country and world as he wants. The president has said he
wants manufacturing jobs back in the United States, along with a smaller
U.S. government workforce and other fundamental changes.
Trump’s latest escalation came Thursday when he threatened 200% tariffs
on Champagne and other European wines, unless the European Union rolls
back a “nasty” tariff announced on U.S. whiskey. The European Union
unveiled that move on Wednesday, in response to U.S. tariffs on European
steel and aluminum.
U.S. households and businesses have already reported drops in confidence
because of all the uncertainty about which tariffs will stick from
Trump’s barrage of on -again, off -again announcements. That’s raised
fears about a pullback in spending that could sap energy from the
economy. Some U.S. businesses say they’ve already begun to see a change
in their customers’ behavior because of the uncertainty.
A particularly feared scenario for the economy is one where its growth
stagnates but inflation stays high because of tariffs. Few tools are
available in Washington to fix what’s called “stagflation.” If the
Federal Reserve were to cut interest rates to boost the economy, for
example, that could also push inflation higher.
Good news came on both those economic fronts Thursday.
One report showed inflation at the wholesale level last month was milder
than economists expected. It followed a similarly encouraging report
from the prior day on inflation that U.S. consumers are feeling.
But “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,” said Chris Larkin, managing director, trading and investing, at
E-Trade from Morgan Stanley.
A separate report, meanwhile, said fewer U.S. workers applied for
unemployment benefits last week than economists expected. It’s the
latest signal that the job market remains relatively solid overall. If
that can continue, it could allow U.S. consumers to keep spending, and
that’s the main engine of the economy.
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A specialist works at his post on the floor of the New York Stock
Exchange, Wednesday, March 12, 2025. (AP Photo/Richard Drew)
 On Wall Steet, some stocks connected
to the artificial-intelligence industry resumed their slide and
weighed on stock indexes. Palantir Technologies, which offers an AI
platform for customers, sank 4.8%. Super Micro Computer, which makes
servers, lost 8%. Nvidia swung between gains and losses before
finishing with a dip of 0.1%.
Such stocks have been under the most pressure in the U.S. stock
market’s recent sell-off after critics said their prices shot too
high in the frenzy around AI.
Other areas of the market that had also been riding big earlier
momentum have seen their fortunes swing drastically. Elon Musk’s
Tesla fell 3% following a rare back-to-back gain, and it’s down more
than 40% so far in 2025.
American Eagle Outfitters dropped 4.1% after the retailer said “less
robust demand and colder weather” have held back its performance
recently. It forecasted a dip in revenue for the upcoming year,
though it also delivered a stronger profit report for the latest
quarter than analysts expected.
On the winning side of Wall Street was Intel, which jumped 14.6%
after naming former board member and semiconductor industry veteran
Lip-Bu Tan as its CEO. Tan, 65, will take over the daunting job next
week, more than three months after Intel’s previous CEO, Pat
Gelsinger, abruptly retired amid a deepening downturn at the
once-dominant chipmaker.
All told, the S&P 500 lost 77.78 points to 5,521.52. The Dow Jones
Industrial Average dropped 537.36 to 40,813.57, and the Nasdaq
composite sank 345.44 to 17,303.01.
In the bond market, Treasury yields lost an early gain to sink
lower. The yield on the 10-year Treasury fell to 4.27% from 4.32%.
The yield has been mostly dropping since January, when it was
approaching 4.80%, as traders and economists have ratcheted back
their expectations for U.S. economic growth.
While few are predicting a recession, particularly with the job
market remaining relatively solid, recent reports have shown a
souring of confidence among U.S. consumers and companies.
In stock markets abroad, indexes fell across much of Europe and
Asia, but the moves were relatively modest.
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AP Business Writers Matt Ott and Elaine Kurtenbach contributed.
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