US stocks extended their declines on Thursday, with the S&P 500 officially slipping into correction territory, weighed down by escalating tariff threats from President Donald Trump. The Dow Jones Industrial Average fell over 530 points, marking its fourth consecutive day of losses, while the Nasdaq Composite faced heavy selling pressure amid declines in tech giants like Tesla and Apple. Trump’s proposal of imposing hefty 200% tariffs on European alcoholic products in retaliation against EU whisky tariffs added further strain, fuelling investor anxiety over a potential intensification of global trade disputes. Despite signs of easing inflation in February, markets remained firmly focused on the uncertainty generated by Trump’s trade policy, driving traders into safer assets and leaving equities on track for their worst weekly performance since mid-2022.

Key Takeaways:

  • S&P 500 Slips into Correction Territory Amid Escalating Trump Tariff Threats: The S&P 500 fell sharply by 1.39%, ending the session at 5,521.52 and officially entering correction territory, now down 10.1% from its recent record close. For the week, the S&P 500 is down approximately 4.3%, reflecting heightened volatility and mounting fears over Trump’s unpredictable trade policy.
  • Dow Jones Declines, Extends Losses for Fourth Straight Session: The Dow Jones Industrial Average lost 537.36 points, or 1.3%, closing at 40,813.57 and marking its fourth consecutive session of losses. The index is on track for its worst weekly performance since June 2022, down approximately 4.7% week-to-date.
  • Nasdaq Composite Sheds Nearly 2%, Led Lower by Tesla and Apple: The Nasdaq Composite fell 1.96% as technology stocks faced significant selling pressure amid trade war concerns. Notable declines in major tech companies such as Tesla and Apple contributed heavily to the downturn. The tech-heavy index now stands more than 14% below its recent record high, deeply within correction territory, and is tracking for a weekly loss of about 4.9%.
  • US Wholesale Prices Flat in February, Easing Inflation Concerns Temporarily: Wholesale prices in the US were unchanged in February, providing some relief amid escalating tariff fears. The producer price index (PPI), which measures prices producers receive for goods and services, showed no gain for the month, against economists’ expectations of a 0.3% increase. Core PPI, excluding food and energy, declined slightly by 0.1% compared to a forecasted rise of 0.3%. Services prices dipped by 0.2%, offsetting a 0.3% increase in goods. 
  • Treasury Yields Fall as Investors Seek Safe-Haven Assets Amid Tariff Anxiety: US Treasury yields declined on Thursday, reflecting heightened investor demand for safe-haven investments amid escalating tariff concerns. The benchmark 10-year Treasury yield dropped over 5 basis points to 4.264%, while the 2-year Treasury yield fell nearly 5 basis points to 3.947%. 
  • Oil Prices Slide Amid Rising Trade Tensions and Concerns Over Demand: Oil prices declined sharply on Thursday, pressured by fears that rising global trade tensions could dampen demand. Brent crude futures fell by $1.03, or 1.45%, settling at $69.90 per barrel, while West Texas Intermediate (WTI) crude futures lost $1.01, or 1.49%, ending at $66.66 per barrel. Adding to bearish sentiment, the International Energy Agency (IEA) warned that global oil supply could outpace demand by about 600,000 barrels per day this year, driven largely by increased US production and a weaker demand outlook amid persistent macroeconomic uncertainty.
  • European Markets Close Lower as Trump Tariff Threat Hits Alcohol and Auto Sectors: European stocks finished lower on Thursday as Trump’s threat of a 200% tariff on European alcoholic products rattled investor sentiment. Notable declines were seen among major beverage producers Pernod Ricard, Rémy Cointreau, and Davide Campari, all falling more than 3%. The pan-European Stoxx 600 index closed 0.15% lower, with the automotive sector also significantly impacted, dropping 1.7% due to potential disruptions from reciprocal tariffs. Germany’s DAX shed 1%, France’s CAC 40 declined by 0.58%, and Italy’s FTSE MIB slipped by 0.80%. Meanwhile, The FTSE 100 Index was up 1.59 points or 0.02%.
  • Asia-Pacific Stocks Decline Despite Positive US Inflation Data: Asia-Pacific markets broadly fell on Thursday, failing to capitalise on softer-than-expected US inflation data, as investors remained cautious about escalating global trade tensions. Japan’s Nikkei 225 ended flat at 36,790.03, Hong Kong’s Hang Seng Index fell 0.57%, and China’s CSI 300 dropped 0.40%. Australia’s S&P/ASX 200 declined 0.48%, marking its third consecutive day of losses. South Korea’s Kospi ended unchanged at 2,573.64, while India’s Nifty 50 eased 0.18%, highlighting cautious sentiment across the region amid persistent tariff-related uncertainties.

FX Today:

  • EUR/USD Declines as Dollar Firms Amid US Tariff Concerns: EUR/USD ended Thursday down 0.32% at 1.0852, reversing earlier gains after investors moved into the US dollar amid renewed tariff threats from President Trump. The pair initially rose to a session high of 1.0897 before retreating sharply to a daily low of 1.0822, as traders sought safety amid escalating US-EU trade tensions. While EUR/USD remains comfortably above key moving averages, including the 50-day SMA at 1.0458, 100-day SMA at 1.0518, and 200-day SMA at 1.0726, immediate support lies near 1.0800. A sustained break below this level could lead to further losses toward 1.0750. On the upside, the 1.0900 psychological mark remains a crucial resistance area.
  • GBP/USD Edges Lower, Resistance at 1.3000 Remains Intact: GBP/USD slipped slightly by 0.13% to close the session at 1.2946. Sterling attempted to push higher, touching an intraday peak of 1.2973, but quickly lost momentum amid broad dollar strength, driven by mounting worries over escalating tariffs. Despite the minor decline, GBP/USD remains above major moving averages, with support seen at the 50-day SMA of 1.2525, the 100-day SMA of 1.2623, and the 200-day SMA of 1.2793. Immediate support lies at 1.2900, followed by 1.2850. For bullish momentum to resume, the pair must convincingly break the 1.3000 resistance barrier.
  • USD/CAD Gains Ground on Broader Dollar Strength: USD/CAD finished the day higher, climbing 0.46% to settle at 1.4433 as the US dollar strengthened broadly amid increased tariff tensions. The pair initially dropped to an intraday low of 1.4358 but found strong support at the 50-day SMA at 1.4347 before rallying to a session high of 1.4450. Immediate resistance stands at the psychological level of 1.4450, with a breakout potentially setting the stage for further upside toward 1.4500. Conversely, support remains firm at 1.4400, with additional downside limited near 1.4350.
  • USD/JPY Moves Lower Amid Increased Demand for Safe-Haven Yen: USD/JPY declined 0.38%, closing the session at 147.67, driven lower by rising demand for the yen as investors turned cautious in response to escalating US-EU trade tensions. The pair briefly rose to a high of 148.37 before reversing course sharply to hit an intraday low of 147.40. Technical indicators highlight the pair’s bearish bias, as it remains significantly below the key moving averages, including the 50-day SMA at 152.99 and the 200-day SMA at 152.02. Immediate downside support is at 147.00, with further weakness exposing 146.50. Resistance remains firm at 148.50, with additional selling likely near 149.00.
  • Gold Prices Surge to New Record Amid Escalating Trade Worries: Gold prices surged sharply higher on Thursday, rising 1.86% to set an all-time record high of $2,989 per ounce as escalating trade tensions sparked a flight to safety among investors. President Trump’s threats of significant tariff hikes on European imports further elevated concerns, driving investors toward safe-haven assets. Immediate resistance is eyed at the psychologically important $3,000 level, with a decisive break above potentially extending gains toward $3,025. Immediate support rests near $2,950, followed by stronger buying interest at $2,900. 

Market Movers:

  • Ulta Beauty Climbs on Earnings Beat: Shares of Ulta Beauty jumped 7% after reporting fourth-quarter earnings of $8.46 per share, exceeding analysts’ expectations of $7.12. Revenue also topped forecasts at $3.49 billion versus estimates of $3.46 billion, although full-year guidance was weaker than anticipated.
  • Docusign Shares Gain on Earnings Beat: Docusign rose 8% after posting fourth-quarter adjusted earnings of 86 cents per share, slightly ahead of the analyst consensus of 85 cents. Revenue reached $776 million, surpassing expectations of $761 million.
  • Rubrik Surges on Narrower-than-Expected Loss: Rubrik rallied 15% after reporting a fourth-quarter adjusted loss of 18 cents per share, significantly better than analysts’ forecast of a 39-cent loss. Revenue came in strong at $258 million, beating estimates of $233 million.
  • PagerDuty Jumps After Strong Earnings, Share Buyback: PagerDuty advanced 9% after delivering fourth-quarter earnings of 22 cents per share on $121.4 million revenue, exceeding analysts’ forecasts of 16 cents per share and $120 million. The company also announced a new share repurchase program.
  • Semtech Surges on Earnings Beat, Strong Guidance: Semtech shares rose nearly 12% after reporting fourth-quarter adjusted earnings of 40 cents per share on revenue of $251 million, topping analyst estimates of 32 cents per share and $249 million revenue. 

Stocks closed sharply lower on Thursday, with the S&P 500 entering correction territory amid escalating tariff threats from President Trump, intensifying concerns over trade policy impacts on global growth and corporate confidence. The Dow Jones extended losses for the fourth consecutive session, while the Nasdaq Composite tumbled further into correction territory. With Treasury yields falling and oil prices pressured by rising trade tensions, markets are likely to remain volatile in the near term as investors continue to navigate uncertainty around global trade policy developments.