Market Drops Again on Trump Trade War Actions….

NEW YORK (AP) — Wall Street keeps shaking because of tariffs. After jumping to a big early gain on an encouraging inflation update, the U.S. stock market lost all of it after other countries announced their retaliations following President Donald Trump’s latest escalation in his trade war.

The S&P 500 was down 0.3% in midday trading after erasing an initial leap of 1.3%. The unsettled trading comes a day after the index briefly fell more than 10% below its all-time high set last month.

The Dow Jones Industrial Average also swung sharply, pinging between a gain of 287 points and a loss of 423. It was down 346 points, or 0.8%, as of 11:15 a.m. Eastern time, while the Nasdaq composite was 0.2% higher. The Nasdaq held up much better because of gains for Nvidia, Tesla and AI-related companies.

Dragging the market lower were U.S. companies that could be set to feel pain because of Trump’s trade war. Brown-Forman, the company behind Jack Daniel’s whiskey, tumbled 7%, and Harley-Davidson sank 5.1%…..

…

The question hanging over Wall Street is how much pain Trump will let the economy endure through tariffs and other policies in order to get what he wants. He’s said he wants manufacturing jobs back in the United States, along with a smaller U.S. government workforce, more deportations and other things.

Even if Trump ultimately goes with milder tariffs than feared, damage could still be done. The dizzying barrage of on -again- off -again announcements on tariffs has already begun sapping confidence among U.S. consumers and businesses by ramping up uncertainty. That in itself could cause U.S. households and businesses to pull back on spending, which would hurt the economy….

…

Wednesday’s inflation report gave some encouragement when worries are high that Trump’s tariffs could drive prices even higher for U.S. households after U.S. importers pass on the costs to their customers…

…

Worries had been rising about a worst-case scenario for the economy and for the Fed, one where economic growth was stagnating but inflation remained high. The Fed has no good tool to fix such “stagflation” because lower interest rates can push inflation higher….

More…