S&P 500 closes in correction territory as Wall Street woes deepen

The S&P 500 index sunk into correction territory Thursday, falling 10 percent in less than a month from a record high.

The S&P closed with a loss of 1.4 percent, falling to just more than 5,521.52. That level is roughly 10 percent below the key index’s most recent record high of 6,144.15, which was set Feb. 19, reaching the threshold for a correction.

The Dow Jones Industrial Average closed with a loss of 1.3 percent, or 538 points, and the Nasdaq composite closed with a loss of 2 percent.

Thursday marked yet another day of steep losses for the stock market amid mounting concerns over the state of the economy and the potential impact of President Trump’s trade agenda.

After a brief reprieve from a better-than-expected inflation report Wednesday, markets continued to sell off after Trump and the European Union exchanged new tariffs and threats.

Trump earlier Thursday threatened to put a 200 percent tariff on wine, Champagne and other alcohol from if the EU did not revoke a new import tax on U.S. whisky. Trump’s 25 percent tariffs on steel and aluminum took effect Wednesday, leading the EU to retaliate with a two-step plan.

The E.U. is set to allow expired tariffs on U.S. goods, which the bloc imposed during its last trade battle with Trump, to return April 1. The E.U. also plans to impose new tariffs on $28 billion in U.S. goods by mid-April.

Trump’s escalating trade wars with Europe, Canada and Mexico have shaken the confidence of business leaders and consumers alike, ramping up the pressure on the president and his party.

More than half of respondents to a Reuters/Ipsos poll, including roughly a third of Republicans, said Trump’s economic policies were too “erratic.” Another 51 percent of respondents to a 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 and goes to work … changes what they’re going to do because they read about tariffs,” JPMorgan Chase CEO Jamie Dimon said in an interview with Semafor on Wednesday.

“But I do think companies might,” he added. “Uncertainty is not a good thing.”

The National Federation of Independent Business (NFIB) optimism index, which measures sentiment among small business owners, fell by 2.1 points in February. The group’s uncertainty index also registered its second-highest reading ever.

Updated at 4:30 p.m. EST