The S&P 500 index sank into the revised territory on Thursday, dropping 10% less than a month from its record high.
The S&P was closed at a loss of 1.4% and fell above 5,521.52. That level reached the correction threshold about 10% below the latest high of the key index of 6,144.15, the most recent highest for the key index set on February 19th.
The Dow Jones industrial average was closed with a loss of 1.3% or 538 points, while the Nasdaq composite closed with a loss of 2%.
Thursday marked yet another day of sharp losses for the stock market as it escalated concerns about the state of the economy and the potential impact of President Trump's trade agenda.
After a brief grace from a better-than-expected inflation report on Wednesday, the market continued to sell out after Trump and the European Union traded new tariffs and threats.
Trump on Thursday threatened to put 200% tariffs on wine, champagne and other alcohol if the EU does not revoke new import taxes on US whiskey. Trump's tariffs on 25% steel and aluminum came into effect Wednesday, leading the EU to retaliate with a two-stage plan.
The EU is set to allow expired tariffs on US goods imposed by the bloc during its final trade war with Trump. I'll be back on April 1st. The EU is also planning to impose new tariffs on $28 billion in US goods by mid-April.
Trump's escalation of trade wars with Europe, Canada and Mexico has shaken similar confidence among business leaders and consumers, and has strengthened pressure on the president and his party.
More than half of respondents to the Reuters/Ipsos poll, including about a third of Republicans, said Trump's economic policies were “too unstable.” Another 51% of respondents to the CNN poll released Thursday say Trump's policies are making the economy worse.
“I don't think the average American consumer who wakes up in the morning to work has read about tariffs so they haven't changed what they're trying to do,” JP Morgan Chase CEO Jamie Dimon said in an interview with Semafor on Wednesday.
“But I think companies might do,” he added. “Uncertainty is not a good thing.”
The National Federation of Independent Businesses (NFIB) Optimism Index, which measures the sentiment of small business owners, fell 2.1 points in February. The group's uncertainty index registered the second highest reading ever.
Updated at 4:30pm ET
