In a large Dutch oven, cook chopped bacon over medium-high heat until golden brown and crispy, about 8 minutes. Use a slotted spoon to transfer the bacon to a plate, leaving the rendered fat in the pot.
Season beef chuck pieces generously with salt and pepper. Sear the beef in batches, ensuring each piece is golden brown on all sides, 8-10 minutes per batch. Transfer the seared beef to the plate with the bacon.
Add diced onion to the pot and cook until softened and caramelized, 4-5 minutes. Pour in the red wine, stirring to scrape up any browned bits (fond) from the bottom of the pot. Let the wine reduce slightly, 2-3 minutes.
Return the seared beef and bacon to the pot. Add beef stock, baby potatoes, carrots, cremini mushrooms, and thyme sprigs. Bring the mixture to a boil, then reduce the heat to low, cover, and simmer for 2 hours, or until the beef is tender.
In a small bowl, whisk together cornstarch and water until smooth. Stir the slurry into the stew and simmer for an additional 5 minutes, or until the stew has thickened. Season with additional salt and pepper to taste.
Serve this hearty red wine-braised beef stew in bowls, paired with mashed potatoes or crusty bread for a comforting meal. Enjoy!