The Dow Jones Industrial Average tumbled by 630 points, or 1.53%, on Thursday, while the S&P 500 slid 1.6% and the Nasdaq Composite dropped 2.2%. If the S&P 500 closes at 5,529.73 or below, it will officially enter market correction territory.
Tariff Threats Weigh on Markets
President Donald Trump intensified trade tensions by threatening to impose a 200% tariff on alcoholic beverages from the European Union. This came after the EU announced a 50% tariff on U.S. spirits, including bourbon, in retaliation for Trump’s sweeping 25% tariffs on steel and aluminum.
Markets initially shrugged off the tariff news on Wednesday, but selling pressure resumed Thursday as concerns over the trade dispute between Washington and Brussels escalated. The ongoing uncertainty around Trump’s tariff policy has contributed to volatility in U.S. markets.
Economic Growth Concerns
“Tariff uncertainty has captured most of the blame for the selling pressure and is exacerbating economic growth concerns,” said Adam Turnquist, chief technical strategist at LPL Financial.
U.S. Treasury Secretary Scott Bessent, speaking on CNBC, downplayed market fears, stating that he is not worried about “a little bit of volatility over three weeks.” Bessent added that the Trump administration remains focused on the “real economy” and long-term growth.
Volatility Surges
Wall Street’s fear gauge, the Cboe Volatility Index (VIX), surged this week to its highest level since December. CNN’s Fear and Greed Index has signaled “extreme fear” in the markets since late February.
The S&P 500 is now down more than 6% in 2025, underperforming major indexes in Europe and Asia.