Stocks sink sharply as investors fret over volley of tariffs [Video]

Even good news on U.S. inflation isn’t assuaging investors spooked by the prospects of a global trade war.

Stocks fell Thursday amid the latest salvo from President Trump, who on Thursday threatened to slap a 200% tariff on European Union exports of wine, champagne and other alcoholic beverages in retaliation for the trading bloc’s hiking of duties on American whiskey to 50%. The EU announced the measures in response to U.S. tariffs on foreign steel and aluminum taking effect on Wednesday. 

The S&P 500 fell 78 points on the day, or 1.4%, to close at 5,521. The index, which rose in the weeks following Mr. Trump’s re-election in November, has given up those gains and is now down roughly 10% from its high of 6,147 on Feb. 19. That puts it in “correction” territory, or when stocks fall at least 10% from their previous peak, a sign investors are souring …