The S&P 500 fell into a correction on Thursday, closing 10% below its February all-time high.
Investors can blame the trade war.
The latest development came on Thursday, when Trump announced a 200% tariff on wine and other alcohol products coming from the EU, in response to metal tariffs.
While President Donald Trump's protectionist spirit was initially greeted as a pro-business catalyst that would drive domestic stocks higher, the flurry of on-and-off-again tariff announcements from Washington has become a painful challenge for investors to overcome.
Here's where markets ended a tough session:
Tariff jitters hit markets soon after Trump's inauguration, but pressure built in February as the president indicated he was fully committed to a trade war with Canada and Mexico. On February 1 he signed executive orders imposing 25% tariffs on America's neighbors and closest trading partners.
The volatility has only worsened since, with more tariff threats, retaliation from Canada and Europe, and rising uncertainty for businesses and markets.
Here is a timeline of key announcements since the S&P 500 hit a record high last month.
The growing trade war has done more than play havoc on equity markets. Recession anxiety is swelling, with economists warning that trading restrictions will ultimately cost the US consumer and hammer growth. Trump's refusal to rule out a recession last weekend sparked one of the worst days for the stock market in years.
Commentators, such as former Treasury Secretary Larry Summers, see the odds of 2025 recession as high as 50%. Stagflation concerns have also risen. Stifel chief equity strategist Barry Bannister told Business Insider that this scenario is likely in the year's second half, as steep tariffs drive inflation higher and reduce economic growth.
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