New York Stock Exchange opened lower amid escalating trade war tensions, despite positive inflation data. The Dow Jones dropped 0.54%, while the Nasdaq and S&P 500 also saw declines. Although the Producer Price Index showed stability, concerns over tariffs overshadowed the optimistic inflation reports. Notable stock movements included a 15.50% surge for Intel following a new CEO announcement, while Adobe fell 11.19% due to disappointing forecasts. Dollar General rose 4.88%, contrasting with American Eagle’s 1.97% decline.
New York Stock Exchange Starts Lower Amid Trade War Tensions
The New York Stock Exchange kicked off on a down note this Thursday, influenced by the latest developments in the ongoing trade conflict sparked by former President Donald Trump. This market dip occurred despite the release of inflation data that surpassed analysts’ expectations. As of 13:55 GMT, the Dow Jones had decreased by 0.54%, the Nasdaq index fell by 1.42%, and the S&P 500 index was down by 0.81%. Patrick O’Hare from Briefing.com noted, “The market remains hindered by certain obstacles,” particularly the uncertainties surrounding tariffs and the economic outlook in the U.S.
Inflation Data and Market Reactions
Before Wall Street opened, investors reacted positively to the Producer Price Index (PPI) report, which evaluates inflation from the producers’ perspective. Over the past month, the index remained unchanged, following a 0.6% increase in January, as reported by the U.S. Department of Labor. Analysts had anticipated a slowdown to 0.3%, according to MarketWatch’s consensus. Year-over-year, the index showed a decrease to 3.2% from 3.7% in January. This came on the heels of Wednesday’s consumer inflation data (CPI), which also outperformed expectations. Peter Cardillo from Spartan Capital Securities emphasized that while this indicates good news regarding inflation, the intensifying trade war has overshadowed these inflation reports, as they are based on February data and do not account for tariffs.
Cardillo further elaborated, “The effects of tariffs won’t be clear until they are fully implemented, making it premature for this data to reflect their impact.” On Thursday, Trump threatened France and the European Union (EU) with imposing tariffs of 200% on their champagnes, wines, and other spirits if the EU’s planned 50% tax on American whiskey remains in place. In retaliation, the EU announced tariffs on various American goods, including bourbon and motorcycles, coinciding with the enforcement of 25% American tariffs on steel and aluminum, set to take effect on April 1.
In the bond market, the yield on ten-year U.S. government bonds climbed to 4.33%, slightly up from 4.31% the day before. Weekly jobless claims also reported a minor decline compared to the previous week, dropping by 2,000 and falling below expectations. On the stock front, semiconductor leader Intel experienced a notable surge of 15.50% following the announcement of Lip-Bu Tan as its new CEO. Intel has been grappling with delays in artificial intelligence initiatives and had previously initiated a plan to reduce its workforce by 15%. The company was also replaced in the Dow Jones index by its competitor Nvidia.
On the other hand, Adobe, a publisher of professional creative software, saw a significant drop of 11.19%, despite posting better-than-expected results for the first quarter of its staggered fiscal year. Investors were disappointed by the forecasts for the current quarter. Meanwhile, discount retailer Dollar General experienced a boost of 4.88%, reporting results that met expectations with revenues of $10.3 billion. However, clothing retailer American Eagle Outfitters faced a decline of 1.97% after projecting a decrease in sales for the first quarter and the full year, contrary to analysts’ predictions.