By STAN CHOE, Associated Press Business Writer
NEW YORK (AP) — The U.S. stock market is falling 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 0.8% 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 192 points, or 0.5%, as of 10 a.m. Eastern time, and the Nasdaq composite was 1.5% lower.
Stocks have been turbulent because of questions 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 such “stagflation.”
But 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.
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, stocks in the artificial-intelligence industry were resuming their slide and weighing on stock indexes. Palantir Technologies sank 5.7%. Constellation Energy, which is hoping to power vast AI data centers, fell 4.6%. And Nvidia lost 1.2%.
These 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 4.3% following its rare back-to-back gain, and its down more than 40% so far in 2025.
Intel jumped 15.3% for one of the market’s bigger gains 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.
American Eagle Outfitters was swinging between gains and losses after saying it’s seeing “less robust demand and colder weather” hold 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 1.9%.
In the bond market, Treasury yields edged higher. The yield on the 10-year Treasury rose to 4.33% from 4.32%.
In stock markets abroad, indexes fell across much of Europe and Asia, but the moves were relatively modest.
AP Business Writers Matt Ott and Elaine Kurtenbach contributed.
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