Stocks dip in early trading as investors fret over volley of tariffs

Even good news on U.S. inflation isn’t assuaging jittery investors focused on the risks of a burgeoning global trade war.

Stocks in the U.S. opened slightly lower amid the latest salvo from President Trump, who on Thursday threatened to slap a 200% tariff on European Union exports of wine, champagne and other alcoholic beverages in retaliation for the trading bloc’s hiking of duties on American whiskey to 50%. The EU announced the measures in response to U.S. tariffs on foreign steel and aluminum taking effect on Wednesday. 

“Trump’s trade agenda is dominating everything, and until there is a cessation in the daily escalation of threats and retaliation, stocks will struggle to rally,” equity analyst Adam Crisafulli of Vital Knowledge told investors in a research note.

The S&P 500 fell 40 points, or 0.7%, to 5,559 shortly after the start of trade. The Dow Jones Industrial Average dropped 208 points, or 0.5%, while the Nasdaq Composite sank 1.4%.

The S&P 500, which rose in the weeks after Mr. Trump was elected in November, has given up those gains and is now down roughly 5% on the year. Since January, the blue-chip Dow and tech-heavy Nasdaq have slipped 3% and 9%, respectively.

Rising uncertainty stemming from the White House’s aggressively protectionist trade policies and mounting concerns about the strength of U.S. economic growth are outweighing recent signs that inflation is easing. Costs for Americans edged down in February, according to Consumer Price Index data released on Wednesday.

“Part of the reason for the limited response to yesterday’s CPI data is that growing concerns about the U.S. economy have taken the focus off the risks of higher inflation related to President Trump’s tariff policies,” John Canavan, lead U.S analyst at Oxford Economics, said in a report.