Investing.com - The S&P 500 closed lower as traders fled stocks following a report Thursday that U.S. President Donald Trump plans to move ahead with tariffs on China as soon as next week, risking a further escalation in the U.S.-China trade war.
The Dow Jones Industrial Average fell about 0.53%. The S&P 500 fell 0.44%, while the Nasdaq Composite fell about 0.26%. The S&P 500 snapped a five-session winning streak.
President Donald Trump plans to move ahead with tariffs on $200 billion in Chinese imports as soon as a public comment period concludes next week, Bloomberg reported, citing six people familiar with the matter.
Some sources said, however, Trump had not made his final decision, according to the report.
Still, the news renewed fears of a full-blown U.S.-China trade war, sending stocks spiraling lower, as Beijing has previously vowed to retaliate with countermeasures.
China threatened in July to impose duties on U.S. products worth more than $60 billion if the Trump administration followed through on threats to impose harsher tariffs on $200 billion of Chinese goods.
Industrial heavyweights such as 3M (NYSE:MMM), Boeing (NYSE:BA) and Caterpillar (NYSE:CAT), all of which have huge exposure to China, fell on the news, pushing the broader averages deeper into the red.
As the U.S.-China trade war looks set to ratchet up a few notches, the U.S.-Canada trade negotiations appear less combative ahead of Friday's deadline.
Canada risks facing tariffs on its auto exports into the U.S. should it fail to join a trade deal struck earlier this week between the U.S. and Mexico, Trump warned earlier this week.
Canada is eager for any agreement on a trade deal with the U.S. to preserve the existing dispute-resolution systems included in North American Free Trade Agreement (NAFTA). The provision aims to independently resolve disputes between NAFTA members.
Corporate earnings, meanwhile, which have helped offset investor concerns over trade were mixed.
Campbell Soup (NYSE:CPB) stock closed 2% lower, as sales fell short of estimates and the company announced it would sell just two international units and its fresh foods business, despite calls by activists for a complete sale of the company.
Abercrombie & Fitch (NYSE:ANF) stock slumped 17% after second-quarter revenue and same-store sales missed estimates. While Guess (NYSE:GES) stock rallied 5.7% after the company topped earnings expectations and guided sales higher.
Energy stocks, meanwhile, reversed gains despite oil prices settling sharply higher on signs of tightening global supplies.
On the New York Mercantile Exchange crude futures for October delivery gained 1.1% to settle at $70.25 a barrel.
On the economic front, data continued to underline the strength of the U.S. economy as inflation met the Fed's target, while consumer spending remains solid.
In other corporate news, Electronic Arts (NASDAQ:EA) stock sank as it cut its bookings forecast for the fiscal year ending in March after announcing a delay to the release of its next Battlefield video game.
Top S&P 500 Gainers and Losers Today:
H&R Block (NYSE:HRB), PerkinElmer (NYSE:PKI) and Micron Technology (NASDAQ:MU) were among the top S&P 500 gainers for the session.
Dollar Tree (NASDAQ:DLTR), Electronic Arts (NASDAQ:EA) and PVH (NYSE:PVH) were among the worst S&P 500 performers of the session.