Wall Street ended a heavy fall on Thursday (13) and the S&P 500 confirmed that it is in a correction, after gentle inflation data was overshadowed by fears that the tariff war climbing against its largest commercial partner could rekindle inflation and bring the economy to recession.
In Trump’s latest episode of Trump’s multifaceted trade war, the European Union responded to US general rates on steel and aluminum imposing a 50% tax on US whiskey exports, which led the president to threaten a 200% tariff on European wine and alcohol imports.
A widespread sale of papers caused the three main stock rates to fall, with losses on technology -related megacap actions, dragging Nasdaq to a fall of almost 2%.
“Humor is horrible,” said Mike Dickson, Horizon Investments head of research in Charlotte, North Carolina. “There are new headlines every day, and that’s weighing about things.”
“And you see it more acutely in some of the most sensitive areas on the market, such as the quite inflated 7 magnificent,” Dickson added. “The feeling is not very good at the moment.”
The S&P 500 closed 10.1% below its closing record on February 19, confirming that the reference index has been in correction ever since.
On March 6, Nasdaq confirmed that it is in correction by closing 10.4% below its historical closing record reached on December 16.
The Dow Jones Transportation index, widely considered as a US economic health barometer, closed 18.9% below its closing record on November 25; A drop of 20% or more would confirm that the index is in a low market.
“There is still a lot of uncertainty about the economy,” said Chuck Carlson, Horizon Investment Services in Hammond, Indiana.
“Part of this uncertainty is certainly being driven by tariffs, but there are other uncertainties out there, and this makes investors think that perhaps forced landing is happening after all.”
The Producer Price Index (PPI) of the Labor Department seemed to echo the CPI data on Wednesday (12), with colder readings than expected, seeming to confirm that inflation continues in its winding path down as it approaches the annual goal of 2% of the Federal Reserve.
This, along with a moderate unemployment request report, has provided some guarantee that, for now, inflation is going in the right direction and the job market is on solid bases.
Markets were also keeping an eye on the ongoing wrestling in the Capitol, while parliamentarians were trying to approve a spending bill before the deadline quickly approaching to avoid partial government stoppage.
Dow Jones Industrial Averag fell 1.30%to 40,813.57 points, S&P 500 lost 1.39%to 5,521.52 points, and NASDAQ retreated 1.96%to 17,303,01 points.
Among the 11 main sectors of S&P 500, except for the public services sector, all ended in negative territory, with communication services and the discretionary consumer goods sector with the largest falls.
