Even the good news about US inflation does not surprise investors who are surprised by the outlook for a global trade war.
US stocks fell slightly lower on Thursday amid the latest salvo from President Trump. Slapping 200% tariff For European Union exports of wine, champagne and other alcoholic beverages, retaliation for hiking jobs in American whiskey has reached 50%. The EU has announced measures in response to US tariffs Foreign matter and aluminum It will come into effect on Wednesday.
“Trump’s trade agenda controls everything. Stocks will struggle to gather until a halt occurs in the daily escalation of threats and retaliation,” stocks analyst Adam Crisafulli’s Vital Knowlede told investors in a research note.
The S&P 500 reached 85 points (1.5%) to 5,514 as of 1:55 PM Eastern time. Dow Jones’ industrial average was 638 points (1.5%), while Nasdaq’s composites sunk 2%.
The S&P 500, which rose in the weeks since Trump’s reelection in November, has abandoned those profits, down about 10% from its 6,147 high on February 19th. This will result in the index being the territory of “modification”. Alternatively, investors are sourizing corporate earnings outlook if the stock has fallen at least 10% from its previous peak. The high-tech NASDAQ has also been revised, but since January, the blue chip stock Dowin index has slipped 4.4%.
The growing uncertainty stemming from the White House’s aggressively protectionist trade policy and concerns about the strength of US economic growth outweigh recent signs that inflation is being eased. American costs Edge down in Februaryaccording to data from the Consumer Price Index released Wednesday.
“Part of the reason for the limited response to yesterday’s CPI data is that growing concern over the US economy focuses on higher inflation risks related to President Trump’s tariff policy,” John Canavan, head of US analysts at Oxford Economics, said in the report.
For now, most Wall Street analysts have been neglecting it The risk of an immediate recession,Please note that the job market remains healthy. However, many signals suggest that the economy is beginning to lose momentum, including weaker corporate revenue, erosion Consumer trust And tough retail sales.
“We’re looking at the economy today, we’re seeing weakness,” said Jamie Dimon, CEO of JPMorgan Chase, who held the event Wednesday in Washington, D.C. by asset management giant BlackRock and the Bipartisan Policy Center. “Consumers are still spending money. Jobs are still plentiful. Wages are still rising. CPI is levelled a bit, but we see the weakening of emotions and certain types of spending that people consider to be more discretionary.”
Signs that stubbornly rises and slows growth Food, rent and other standard pricesraised concern that the United States could ultimately face “stagflation.”
Cross-current, which eases the economy, complicates the lives of Federal Reserve policymakers. The Federal Reserve must balance the mission and ongoing efforts to keep the economy on track. Analysts at Morgan Stanley predicted on Thursday that the central bank will not change benchmark interest rates at its next meeting on March 18-19.
“The core message from the January meeting, when Chair (Jerome) Powell emphasized that the Fed is not in a hurry to adjust its policies, is likely to remain in March,” they wrote in the report.
