Wall St trips on Trump's latest tariff threat

The main US stock indexes have slipped as President Donald Trump's escalated tariff rhetoric against the European Union impacted investor sentiment, although cooling inflation provided some relief.

In his latest trade salvo, Trump announced a plan to levy a 200 per cent duty on European beverage imports unless the EU removes surcharges on US whiskey. He had previously threatened to penalise the bloc if it imposed retaliatory tariffs on American goods next month.

US beverage makers rose, with Brown-Forman adding 1.6 per cent, Molson Coors edging up 0.3 per cent and Constellation Brands adding 0.9 per cent.

"The guidance out of the White House is so erratic that investors cannot absorb every news flash into their investment strategies," said Peter Andersen, founder of Andersen Capital Management.

Markets were roiled earlier this week by Trump's unpredictable trade restrictions, stoking concerns that an escalating trade conflict on multiple fronts could spur domestic inflation and potentially hinder growth.

The trade restrictions have unsettled investors, leading brokerages to lower their projections for US equities, while several companies have issued cautious forecasts.

Dollar General forecast annual comparable sales growth largely below estimates. However, its shares gained 4.5 per cent on its upbeat quarterly results.

Consumer discretionary led declines amongst S&P 500 sub-sectors, falling 1.8 per cent. Tesla and Amazon.com lost 3.6 per cent and 1.8 per cent, respectively.

Offering investors some hope on the economy's resilience, data showed producer prices were unexpectedly unchanged in February, while a separate weekly report pointed to fewer-than-expected jobless claims.

However, worries that the trend could be short-lived prevailed, with traders expecting the US Federal Reserve to lower borrowing costs by nearly 75 basis points in the second half of the year, according to data compiled by LSEG.

"Many people will discount these numbers. However, they do speak to the underlying trend... (before tariffs took) effect, and at least we are starting from a better place," said Chris Zaccarelli, chief investment officer for Northlight Asset Management.

In early trading on Thursday, the Dow Jones Industrial Average fell 174.90 points, or 0.42 per cent, to 41,176.03, the S&P 500 lost 28.94 points, or 0.52 per cent, to 5,570.36, and the Nasdaq Composite was down 142.66 points, or 0.81 per cent, to 17,505.79.

The benchmark S&P 500 teetered on the brink of its longest weekly losing streak in seven months.

Markets were also on edge with a deadline to pass a funding bill in the US Senate fast approaching. If it goes through, the bill will keep the US government operational through September 30.

Among other stocks, Intel jumped 15.7 per cent after the beleaguered chipmaker appointed industry veteran Lip-Bu Tan its chief executive officer.

Adobe dropped 10.9 per cent after the Photoshop-maker forecast quarterly revenue in line with estimates.

Shares of truck- and parts-makers such as Paccar and Cummins fell 2.8 per cent and 1.5 per cent, respectively, after the Environmental Protection Agency launched efforts to undo the previous administration's vehicle-emissions rules.

Declining issues outnumbered advancers by a 1.11-to-1 ratio on the NYSE, and by a 1.29-to-1 ratio on the Nasdaq.

The S&P 500 posted no new 52-week highs and 11 new lows, while the Nasdaq Composite recorded nine new highs and 84 new lows.