After an initial move to the downside, stocks have regained some ground over the course of morning trading on Wednesday. The major averages have climbed off their worst levels of the day but remain in negative territory.
Currently, the Dow is down 135.74 points or 0.5 percent at 24,783.92, the Nasdaq is down 17.04 points or 0.2 percent at 7,742.16 and the S&P 500 is down 10.95 points or 0.4 percent at 2,782.89.
The initial weakness on Wall Street came amid renewed concerns about the economic impact of a global trade war after President Donald Trump's administration proposed new tariffs on China.
Trump has ordered U.S. Trade Representative Robert Lighthizer to begin the process of imposing tariffs of 10 percent on an additional $200 billion of Chinese imports.
The move comes after the U.S. imposed a 25 percent tariff on $34 billion worth of Chinese imports last Friday, leading China to retaliate by imposing tariffs on $34 billion worth of U.S. exports.
"For over a year, the Trump Administration has patiently urged China to stop its unfair practices, open its market, and engage in true market competition," Lighthizer said. "We have been very clear and detailed regarding the specific changes China should undertake."
"Unfortunately, China has not changed its behavior - behavior that puts the future of the U.S. at risk," he added. "Rather than address our legitimate concerns, China has begun to retaliate against U.S. products. There is no justification for such action."
China has vowed to take countermeasures in response to the new tariffs, which will not effect until after a two-month review process.
In U.S. economic news, the Labor Department released a report showing producer prices increased by slightly more than expected in the month of June.
The Labor Department said its producer price index for final demand rose by 0.3 percent in June after climbing by 0.5 percent in May. Economists had expected prices to edge up by 0.2 percent.
Excluding food and energy prices, core producer prices also climbed by 0.3 percent in June, matching the increase seen in May. Core prices had been expected to rise by 0.2 percent.
Compared to the same month a year ago, producer prices were up by 3.4 percent in June, representing the largest 12-month increase since a 3.7 percent jump in November of 2011.
Steel stocks have shown a significant move to the downside on the day amid concerns about the impact of the trade dispute between the U.S. and China. Reflecting the weakness in the sector, the NYSE Arca Steel Index is down by 2.1 percent.
Considerable weakness has also emerged among transportation stocks, as reflected by the 1.5 percent drop by the Dow Jones Transportation Average.
Semiconductor, telecom, and chemical stocks are also seeing notable weakness, moving lower along with most of the other major sectors.
In overseas trading, stock across the Asia-Pacific region saw substantial weakness during trading on Wednesday. Japan's Nikkei 225 Index slumped by 1.2 percent, while China's Shanghai Composite Index plunged by 1.8 percent.
The major European markets have also shown significant moves to the downside on the day. While the U.K.'s FTSE 100 Index has tumbled by percent, the German DAX Index and the French CAC 40 Index are both down by 1.3 percent.
In the bond market, treasuries have pulled back off their highs of the session but continue to see modest strength. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.1 basis points at 2.862 percent.
by P2PNews Staff Writer