Wall Street tumbles 10% below its record for first ’correction’ since 2023 on Trump’s trade war

Wall Street plunges as Trump's trade war escalates, S&P 500 drops 10%, sparking fears of economic turmoil.

Wall Street’s sell-off hit a new low Thursday (March 14, 2025) after President Donald Trump’s escalating trade war dragged the S&P 500 more than 10% below its record, which was set just last month.

A 10% drop is a big enough deal that professional investors have a name for it – a “correction” – and the S&P 500’s 1.4% slide on Thursday (March 14, 2025) sent the index to its first since 2023. The losses came after Mr. Trump upped the stakes in his trade war by threatening huge taxes on European wines and alcohol. Not even a double shot of good news on the U.S. economy could stop the bleeding.

The Dow Jones Industrial Average dropped 537 points, or 1.3% Thursday (March 14, 2025), and the Nasdaq composite fell 2%.

The dizzying, battering swings for stocks have been coming not just day to day but also hour to hour, and the Dow hurtled between a slight gain and a drop of 689 points on Thursday (March 14, 2025).

The turbulence is a result of uncertainty about how much pain Mr. Trump will let the economy endure through tariffs and other policies in order to reshape the country and world as he wants. The president has said he wants manufacturing jobs back in the United States, along with a smaller U.S. government workforce and other fundamental changes.

Mr. Trump’s latest escalation came Thursday (March 14, 2025) when he threatened 200% tariffs on Champagne and other European wines, unless the European Union rolls back a “nasty” tariff announced on U.S. whiskey. The European Union unveiled that move on Wednesday (March 13, 2025), in response to U.S. tariffs on European steel and aluminium.

U.S. households and businesses have already reported drops in confidence because of all the uncertainty about which tariffs will stick from Mr. Trump’s barrage of on-again, off-again announcements. That’s raised fears about a pullback in spending that could sap energy from the economy. Some U.S. businesses say they’ve already begun to see a change in their customers’ behaviour because of the uncertainty.