US open: Heavy losses at the open as trade spat intensifies
Wall Street trading began with heavy losses at the bell on Thursday following news that the White House was moving ahead with preparations to increase tariffs on Chinese exports even as a negotiating team from Beijing arrives in Washington for two days of talks.
As of 1530 BST, the Dow Jones Industrial Average was down 1.51% - almost 400 points - at 25,574.80, while the S&P 500 was trading 1.44% weaker at 2,837.89 and the Nasdaq Composite went south 1.82% to 7,798.87.
Although they tried to avoid it, opening in the green across the board, US stocks finished the Wednesday session mostly lower, extending the S&P 500 and Nasdaq's losing streak to a third straight session on the back of the escalating tensions between Washington and Beijing.
With sentiment already hit by the current state of the trade talks themselves, Trump seemed determined to rattle the cage at a Republican Party rally on Wednesday.
"You see the tariffs we're doing? Because they broke the deal. They broke the deal," Trump said. "They can’t do that, so they’ll be paying."
China, which currently has its top trade envoys en route to Washington, including Vice Premier Liu He, made it clear that it wouldn't go down without a fight against the 10% to 25% increase to tariffs on $200bn-worth of Chinese goods, set to come into action on Friday.
"China deeply regrets that if the US tariff measures are carried out, China will have to take necessary countermeasures," said the country's Commerce Ministry.
On the data front, the States' goods trade deficit with China, one of the focal points of Trump's "America First" agenda, dropped to a five-year low in March as exports, including soybeans, surged.
The highly sensitive goods trade deficit with China fell 16.2% to $20.7bn, the lowest level since March 2014, according to the Commerce Department. On the other hand, imports from the world's second-largest economy dropped 6.1% as exports jumped 23.6%.
Elsewhere, the number of Americans filing for unemployment benefits fell less than expected last week, according to figures from the Labor Department.
US initial jobless claims fell by 2,000 to 228,000 from the previous week's unrevised level. Economists had been expecting a bigger decline to 220,000.
In other news, wholesale prices in the States edged up last month, buoyed dearer energy as well as transportation and warehousing costs.
According to the Bureau of Labor Statistics, total final demand prices advanced at a 0.2% month-on-month clip in April, although versus a year ago the rate of increases was steady at 2.2% (consensus: 2.3%).
Lastly, wholesale inventories in fell 0.1% in March, while sales jumped 2.3%. The ratio of inventories to sales dropped to 1.32 from the 1.35 turned in a month earlier, but was still up on the 1.29 reported twelve months earlier, when the economy was somewhat stronger.
Also of note, Federal Reserve chairman Jerome Powell made some "brief opening remarks" at the Fed's community development research conference, stating that the relatively subdued growth rate of middle-class incomes, widening inequality and diminishing prospects for poorer Americans to move up the economic ladder were "crucial" problems for the country.
"Many Americans believe being middle class means having a secure job and the ability to save. In recent decades, income growth for middle-income households has lagged," Powell said.
"The prospect of moving up the economic ladder depends on factors beyond effort and talent, including your family, the neighbourhood you grow up in, and the quality of the primary and secondary schools you attend," he added, highlighting factors such as race and ethnicity.
In corporate news, Norwegian Cruise Line shares ticked ahead at the open after beating estimates for quarterly earnings.
Dropbox will post its first-quarter figures at the end of trading and ride sharing giant Uber will announce the price for its long-awaited initial public offering after the close.