Wall Street’s main indexes opened lower on Thursday, driven by renewed uncertainty after US President Donald Trump reignited trade tensions with the European Union. His latest threat to impose a massive 200% tariff on European beverages — unless the EU removes additional fees on American whiskey — sent ripples through the financial markets. Trump also warned that any retaliatory tariffs from the EU next month would be met with further penalties on European goods, escalating fears of a full-scale trade war.
At the opening bell, the S&P 500 dipped 0.9 points, or 0.09%, settling at 5,594.45. The Dow Jones Industrial Average dropped 70.9 points, or 0.17%, to 41,280.05, while the Nasdaq Composite fell 49.9 points, or 0.28%, to 17,598.565, reflecting the market’s skittish mood.
Among individual stocks, Intel Corp. emerged as the standout performer, soaring by 13.54%. This surge was fueled by stronger-than-expected earnings, bolstered by optimism around the company’s advancements in next-generation chip technology, which is expected to drive growth in artificial intelligence and data centers. Moderna Inc. also posted impressive gains, rising by 4.77%, as the pharmaceutical company announced promising results for its latest vaccine trials, raising hopes for new treatments. Royal Caribbean Group followed suit, climbing 4.44%, buoyed by robust travel demand projections and an uptick in cruise bookings. Retail giant Dollar Tree Inc. and financial analytics leader Fair Isaac Corp. also posted gains, reflecting resilience in the consumer and financial technology sectors.
However, the day wasn’t kind to all stocks. Adobe Inc. plummeted by 9.54%, dragged down by disappointing revenue forecasts, despite strong product launches. Paccar Inc., Cummins Inc., Hormel Foods Corp., and Mid-America Apartment Communities Inc. also saw declines, with analysts pointing to weaker-than-expected sales and rising operational costs as key factors.
Trump’s latest tariff pronouncements, particularly the threat to target European alcoholic beverages, sparked widespread concern among market analysts. European leaders quickly pushed back, hinting at potential countermeasures if the US follows through with its threats. The looming standoff has left companies on both sides of the Atlantic scrambling to assess potential disruptions to their supply chains and profit margins.
Peter Andersen, founder of Andersen Capital Management, voiced the market’s growing frustration, telling Reuters, “The guidance out of the White House is so erratic that investors cannot absorb every news flash into their investment strategies.” The unpredictability has led to volatile swings, with traders struggling to keep up with the fast-changing landscape.
Global markets reflected this uncertainty. European stocks and US futures slipped as investors grappled with the threat of escalating trade disputes. However, signs of slowing US inflation offered a glimmer of hope, softening the market’s overall decline. Analysts are cautiously optimistic that easing inflation might give the Federal Reserve reason to pause interest rate hikes, which could provide some stability to jittery markets.
Mohit Kumar, chief European economist at Jefferies, explained, "Markets are still being driven by Trump tariffs and US growth concerns," noting that even positive economic data is struggling to break through the cloud of trade anxieties.
Over the past few weeks, global equities — particularly US stocks — have wavered under the weight of Trump’s unpredictable trade policies. The president’s confrontational stance has unnerved both businesses and investors, creating an environment of uncertainty that complicates long-term planning. Industries reliant on international supply chains — including technology, automotive, and agriculture — face the greatest vulnerability, as they depend heavily on cross-border trade.
For companies, the stakes are especially high. European producers of beer, wine, and spirits stand to suffer if Trump’s tariff threats materialize, with American distributors likely to pass on higher prices to consumers. Conversely, US whiskey exporters, already grappling with EU tariffs from previous disputes, fear further losses if negotiations stall.
Investors now face a delicate balancing act. On one hand, the prospect of cooling inflation offers some reassurance that the Fed may ease off its aggressive monetary tightening. On the other, the escalating tariff rhetoric threatens to overshadow these gains, potentially choking economic growth and denting corporate profits.
As markets brace for more volatility, all eyes remain on the White House and the EU’s next move. Whether this latest round of tariff threats leads to a compromise or spirals into a tit-for-tat trade war could define the market’s trajectory in the weeks to come.
