Stocks fell on Thursday, with equities unable to shake a three-week market rout under the weight of new tariff threats from President Donald Trump.

The S&P 500 dropped about 1.3%, bringing its losses from its record close in February to 10%. If the benchmark closes at these levels, it will be an official market correction, according to Wall Street. The Dow Jones Industrial Average fell 481 points, or 1.2%, its fourth day of declines putting it below the 41,000 level. The Nasdaq Composite shed 1.8% with shares like Tesla and Apple lower.
Trump took to his Truth Social platform Thursday morning to threaten 200% tariffs on all alcoholic products coming from countries in the European Union in retaliation for the bloc's 50% tariff on whisky. "This will be great for the Wine and Champagne businesses in the U.S.," he wrote. Trump later remarked that he wouldn't be changing his mind on a broader group of tariffs set to be implemented on April. 2.

The disorderly rollout of Trump's U.S. trade policy has rattled markets this month, with investors worried it was pressuring corporate and consumer confidence. The losses have intensified this week. The S&P 500 and Nasdaq are respectively on track for losses of 4.2% and 4.8% week to date. The Dow is off 4.6% in the period, heading for its biggest weekly decline since March 2023.

The Nasdaq was already well into correction territory heading into Thursday's session and now sits more than 14% below its recent record. The small-cap benchmark Russell 2000 is approaching a bear market, with it down nearly 19% from its high.

"These tariff wars are intensifying before they're abating. It just adds to unpredictability and uncertainty, and that's a negative for stocks, obviously," said Jed Ellerbroek, portfolio manager at Argent Capital Management.

On Thursday, Treasury Secretary Scott Bessent said that the Trump administration is more focused on the long-term health of the economy and markets, rather than short-term movements. "I'm not concerned about a little bit of volatility over three weeks," he said on CNBC's "Squawk on the Street."

Stocks fell despite some encouraging inflation signs. February's producer price index — which measures the cost of producing consumer goods and is a good indicator of inflationary pressures — was flat that month, compared with an expected increase. This follows a softer-than-expected February consumer price index reading.

Though market strategists have been watching for a technical bounce after the recent sell off, some say the latest inflation data likely isn't enough to lead to a sizable rebound. Concerns over Trump's trade policies remain a key hangover on investor sentiment, and they throw into question how the Federal Reserve may proceed on interest rates.

"I think the Fed would like for rates to be lower, and the economy would like for rates to be lower ... but we're not seeing body language from the Fed that's saying they're imminently going to get off the pause button here," Ellerbroek added.

Source: CNBC