US stocks keep swinging as Trump’s latest tariff threat offsets good news on the economy
NEW YORK (AP) — The U.S. stock market is still swinging Thursday, even after getting a double-shot of encouraging news on the economy. President Donald Trump keeps upping the stakes in his trade war, with his most recent threat to tax wines and other alcohol coming from Europe.
The S&P 500 was down 0.3% in morning trading, coming off a dizzying stretch where it set a record and then briefly tumbled as much as 10% from the mark within just a few weeks. The Dow Jones Industrial Average was down 54 points, or 0.1%, as of 10:30 a.m. Eastern time, and the Nasdaq composite was 0.5% lower.
The swings for stocks have been coming not just day to day but also hour to hour, and the Dow went between a drop of 230 points and a slight gain within Thursday’s first hour of trading.
The turbulence is because 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. He’s said he wants manufacturing jobs back in the United States, along with a smaller U.S. government workforce and other fundamental changes.
Trump on Thursday said he would put 200% tariffs on European wine and champagne if the European Union doesn’t roll back a “nasty” tariff it placed on U.S. whiskey. The European Union announced that move on Wednesday, in response to U.S. tariffs on European steel and aluminum that kicked in earlier in the day.
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 that they could pull back on their spending and sap energy from the economy. Some U.S. businesses say they’ve already begun seeing a change in behavior among their customers.
A particularly feared scenario for the overall 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.”
Good news came on both 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 the inflation that U.S. consumers are feeling.
It was clearly encouraging, said Chris Larkin, managing director, trading and investing, at E-Trade from Morgan Stanley. 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.”
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 it can continue, that can allow U.S. consumers to keep spending, and that’s the main engine of the economy.
On Wall Steet, some stocks in the artificial-intelligence industry were resuming their slide and weighing on stock indexes. Palantir Technologies sank 3.2%. Constellation Energy, which is hoping to power vast AI data centers, fell 1.8%. Nvidia initially fell but crawled back to a gain of 1.2%.
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 3.2% following a rare back-to-back gain, and it’s down more than 40% so far in 2025.
American Eagle Outfitters was swinging between gains and losses after the retailer said “less robust demand and colder weather” has held back its performance recently. It forecasted a dip in revenue for the upcoming year, but it also delivered a stronger profit report for the latest quarter than analysts expected. Its stock was most recently down 1%.
On the winning side of Wall Street was Intel, which jumped 16.4% 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.
In the bond market, Treasury yields edged higher. The yield on the 10-year Treasury rose to 4.34% from 4.32%.
The yield has been mostly falling 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.
