Wall Street ended sharply lower on Thursday and the S&P 500 confirmed it is in a correction after cool inflation data was overshadowed by fears that the escalating tariff war being waged by the United States against some of its biggest trading partners could reignite inflation and tip the economy into recession.

In the latest episode of Trump's multi-front trade war, the European Union responded to blanket U.S. tariffs on steel and aluminum by imposing a 50% tax on American whiskey exports, prompting the president to threaten on Truth Social to charge a 200% tariff on imports of European wines and spirits.

Market Snapshot

The Dow Jones Industrial Average fell 537.36 points, or 1.30%, to 40,813.57, the S&P 500 lost 77.78 points, or 1.39%, to 5,521.52 and the Nasdaq Composite lost 345.44 points, or 1.96%, to 17,303.01. Meta Platforms, Inc., Palantir Technologies Inc. fell 5%, Apple fell 3%.

Market Movers

Intel named Lip-Bu Tan, a former CEO of Cadence Design Systems, as its new CEO, and shares of the struggling chip company jumped 15%. Tan once sat on the Intel board, but left in August after a dispute over the company's direction. Entering Thursday, Intel stock had declined 52% over 12 months with the chip company failing to keep pace with its semiconductor peers.

Shares of NVIDIA, the leading maker of artificial-intelligence chips, were down 0.1% after closing Wednesday up 6.4%. Coming into Thursday, the stock had declined nearly 14% this year, partly because Trump's trade policies have raised fears of a recession. The drop in Nvidia's valuation also makes the company the second-least expensive member of the Magnificent Seven by that metric; the cheapest is Alphabet.

Tesla Motors was down 3%. Shares of the electric-vehicle maker closed Wednesday with a gain of 7.6% following Tuesday's increase of 3.8%. CEO Elon Musk, at a White House event Tuesday with President Donald Trump, issued a pledge that Tesla would double output in the U.S. within two years.

Adobe reported first-quarter adjusted earnings and revenue that topped analysts' estimates but shares of the software company declined 14% after fiscal second-quarter guidance disappointed. Adobe expects second-quarter adjusted earnings per share of $4.95 to $5 on revenue of $5.77 billion to $5.82 billion. Analysts were looking for adjusted earnings of $5 a share on revenue of $5.8 billion, according to FactSet. The company backed its fiscal-year outlook with CEO Shantanu Narayen saying Adobe that was "well-positioned to capitalize on the acceleration of the creative economy driven by AI."

Fourth-quarter adjusted earnings at UiPath were better than expected but shares fell 16% after the automation-software developer issued fiscal first-quarter and fiscal-year revenue guidance that missed forecasts. UiPath expects first-quarter revenue of between $330 million and $335 million, below expectations of $367.5 million. CEO Ashim Gupta said its outlook reflects "increasing global macro economic uncertainty, particularly in the U.S. public sector."

SentinelOne, Inc posted fourth-quarter earnings that beat Wall Street estimates but the cybersecurity company issued revenue guidance below expectations. SentinelOne expects fiscal-year revenue of $1.007 billion to $1.012 billion, below consensus estimates for $1.03 billion. Shares fell 5.5%.

American Eagle Outfitters said the first quarter was " off to a slower start than expected" because of weaker demand and colder weather. CEO Jay Schottenstein expects a rebound as the spring season gets under way but said the retailer was "taking proactive steps to strengthen the top-line, manage inventory and reduce expenses." American Eagle forecast a low-single digit decline in fiscal-year revenue. The stock fell 4.2%.

D-Wave Quantum Inc. rose 19% after the quantum-computing company reported a fourth-quarter adjusted loss of 8 cents a share, wider than the loss of 6 cents expected by analysts. Revenue of $2.3 million was down 21% from a year earlier but topped estimates. Bookings in the period were a record $18.3 million, the company said, an increase of more than 500% from a year earlier.

Dollar General gained 6.9% after the discount retailer reported better-than-expected fiscal-fourth-quarter sales. The company expects earnings per share to grow more than 10% beginning in 2026. Peer Dollar Tree was up 6.6%.

U.S.-listed shares of Diageo PLC, the maker of Johnnie Walker Scotch whisky, declined 0.4% while Class B shares of Brown-Forman, the U.S. maker of Jack Daniel's, rose 1.6% after Trump threatened to impose a 200% tariff on alcoholic beverages imported from the European Union after the EU's executive body unveiled retaliatory tariffs.

Market News

Trump and Senate Republicans Fail to Solve US Debt Ceiling Problem

President Donald Trump and key Senate Republicans are still grasping for a solution to the US government closing in on breaching its legal borrowing limit following a White House meeting Thursday.

The senators, including Majority Leader John Thune and Finance Chairman Mike Crapo, discussed whether to increase the debt ceiling in the tax-and-spending package that Republicans intend to pass this year. Most analysts believe the US will default on a payment obligation sometime this summer without a debt ceiling increase.

“There wasn’t a decision made,” Thune said after the meeting.

The talks Thursday played out against the backdrop of a looming Saturday government shutdown amid a stalemate in the Senate.

Tesla Warns the U.S. Trade Rep About the Harmful Impact of Tariffs

Tesla Motors sent a letter to U.S. trade representative Jamieson Greer with a warning about the harmful impact on automakers and consumers of retaliatory tariffs against the U.S.

The letter made clear that Tesla supports fair trade. However, the company thinks U.S. exporters can be exposed to disproportionate impacts when other countries respond to U.S. trade actions, particularly for the electric vehicle industry.

"For example, past trade actions by the United States have resulted in immediate reactions by the targeted countries, including increased tariffs on EVs imported into those countries," read part of the letter.

"Even with aggressive localization of the supply chain, certain parts and components are difficult or impossible to source within the U.S."