Aussie Shares Hold as Wall Street Dives in Trade War

Australian shares wobbled early but bounced back after Trump ramped up the trade war with threats of massive taxes on European wines and spirits.

The S&P/ASX 200 dipped at the open but quickly rebounded, rising 0.2% (12.7 points) to 7,761.80 by 10:19 AM, according to the Australian Financial Review. The All Ordinaries also gained 0.2%, though banks and financial stocks took a hit.

Markets were jittery following another brutal sell-off on Wall Street. Even some solid economic news from the US couldn’t stop the slide.

Wall Street in Correction Territory

The S&P 500 was down 1.5% in afternoon trading, putting it on track for a 10% drop from its recent record high—a milestone traders call a “correction”. If it finishes the day below that mark, it’ll be the first official correction since 2023.

The Dow Jones dropped 635 points (1.5%) by 2 PM US Eastern Time, while the Nasdaq fell 2.1%. Markets have been all over the place, with the Dow swinging between small gains and a staggering 689-point loss throughout the day.

What’s Causing the Chaos?

It all comes down to uncertainty—especially around Trump’s aggressive trade policies.

The latest move? He’s threatening 200% tariffs on champagne and other European wines unless the EU reverses a recently announced tax on American whiskey. That EU tariff was itself a response to Trump’s new steel and aluminium tariffs—so now it’s an escalating trade standoff.

For US businesses and households, the constant back-and-forth has dented confidence and spending habits. Companies are already warning that customers are holding back on purchases, worried about what’s coming next.

The biggest fear? Stagflation—where economic growth stalls but inflation stays high due to tariffs. If that happens, Washington has very few tools to fix it.

A Few Bright Spots

Despite the turmoil, there was some good news:

• Inflation at the wholesale level was lower than expected, adding to an earlier report showing that consumer inflation is cooling.

• Fewer Americans filed for unemployment benefits, signaling the job market is holding up.

  
  

A strong job market keeps consumer spending steady, which is crucial for the US economy.

AI Stocks & Tesla Take a Hit

Tech stocks—especially AI-related companies—were under pressure again.

• Palantir Technologies (AI software): down 5.4%

• Super Micro Computer (AI server maker): down 6.7%

• Nvidia (AI chip giant): swung up and down before settling 0.2% lower

Even Tesla fell 4.2%, continuing a 40% slide in 2025 after a rare two-day rally.

Intel Bucks the Trend

One of the few winners was Intel, which soared 13.7% after naming semiconductor industry veteran Lip-Bu Tan as CEO. He takes over next week after the abrupt exit of Pat Gelsinger.

Bond Yields & Global Markets

Treasury yields initially climbed but later fell, with the 10-year Treasury dropping to 4.26% from 4.32%. Since January, yields have been steadily falling as traders lower expectations for US growth.

Markets across Europe and Asia also slipped, but the declines were fairly modest.

What’s Next?

With markets on edge, all eyes are on whether Trump’s tariff threats will actually become policy—or if cooler heads will prevail. Either way, volatility isn’t going anywhere.