After strong mid-week rally, stocks finish firmly lower on Thursday.
U.S. stocks declined sharply Thursday, as Dow industrials shed more than 200 points after the Trump administration announced it would move ahead with tariffs targeting Canadian, Mexican and European steel.
The Dow Jones Industrial Average (NYSEARCA:DIA) declined 251.94 points, or 1%, to 24,415.94.
The broader S&P 500 Index (NYSEARCA:SPY) finished down 0.7% at 2,705.27, with most sectors booking losses.
Meanwhile, the technology-driven Nasdaq Composite Index (NYSEARCA:QQQ) dipped 0.3% to close at 7,442.12.
A measure of implied volatility known as the CBOE VIX (NYSEARCA:VXX) was back in positive territory Thursday, gaining more than 3% to 15.43. The so-called “fear index” spiked more than 28% following Memorial Day as political risks weighed on equity markets.
The Trump administration has confirmed it will impose steel and aluminum duties on its closest allies, a move that many say will spark a global trade war. Canada, Mexico and the European Union (EU) have each announced plans for retaliatory tariffs on Washington.
In economic data, U.S. personal spending accelerated faster than expected in April, while income from all sources rose steadily compared with the previous month.
Spending jumped 0.6% month-on-month, compared to forecasts calling for 0.4%, the Labor Department said. Personal income rose 0.3%, official data showed.
The Final Word: Trade risks loom large for Wall Street, which is generally averse to any kind of protectionism. This could make for a difficult summer as equity markets contend with lower volumes.