On Thursday, US benchmark equity indexes experienced a downturn following Donald Trump’s warning of a potential 200% tariff on alcohol imports from the European Union. The Nasdaq Composite fell by 2%, landing at 17,303, whereas the S&P 500 saw a decrease of 1.4% to reach 5,521.5. The Dow Jones Industrial Average also dipped by 1.3%, closing at 40,813.6.
Across the board, all sectors saw declines apart from utilities, with consumer discretionary and communication exhibiting the most significant losses. In the bond market, US Treasury yields faced declines, with the 10-year rate dropping approximately 4.4 basis points, settling at 4.27%, while the two-year rate fell by 3.8 basis points to 3.96%. In specific commodity news, April West Texas Intermediate crude oil fell by 1.6%, priced at $66.57 a barrel on Thursday. From an economic standpoint, Trump’s warning indicated that if the European Union does not revoke its tariff on US whiskey, a hefty 200% tariff on all alcohol imports from the EU would come into immediate effect.
Moreover, US producer prices remained unchanged in February, reflecting a reduction in wholesale service costs, according to a recent report from the Bureau of Labor Statistics. "More than 40 percent of the decline in February prices for final demand services can be linked to margins in machinery and vehicle wholesaling, which saw a decrease of 1.4%," the Bureau stated. In the realm of unemployment, the weekly jobless claims in the US fell by 2,000 from the previous week’s numbers, now totaling 220,000, as per the Department of Labor data. Turning to company-specific news, Intel emerged as the top gainer on the S&P 500, with shares surging nearly 15%.
This significant jump came after the chip maker announced the appointment of industry veteran Lip-Bu Tan as CEO, effective March 18. Oppenheimer expressed confidence, stating, "We believe Intel has greater potential to restructure and improve under his leadership, especially given their robust brand position in enterprise PC and server CPUs." Dollar General also saw a commendable rise, with shares up 6.8%.
Even though the company reported that its fiscal fourth-quarter earnings fell short of Wall Street's expectations, its sales managed to surpass estimates. In contrast, Adobe experienced the largest decline on the S&P 500, with shares plummeting nearly 14%. The firm’s fiscal first-quarter results highlighted a notable "weakness" in net-new digital media annual recurring revenue, alongside smaller beat magnitudes and a cautious quarterly outlook, according to Oppenheimer. Meanwhile, OSI Systems faced a 3.5% drop in shares following a report from a short-seller alleging the company misrepresented its financial standings concerning its operations in Mexico. In the commodity market, gold prices rose by 1.6%, trading at $2,994.90 per troy ounce, while silver surged 2% to reach $34.40 per troy ounce..