After ending the previous session modestly lower, stocks have shown a substantial move to the downside in morning trading on Thursday. With the steep drop on the day, the tech-heavy Nasdaq has fallen to a nearly two-month intraday low.
Currently, the major averages are off their worst levels but still sharply lower. The Dow is down 333.75 points or 1.3 percent at 25,442.86, the Nasdaq is down 107.57 points or 1.4 percent at 7,643.29 and the S&P 500 is down 33.77 points or 1.2 percent at 2,822.50.
Lingering trade concerns have contributed to the sell-off on Wall Street amid further indications of rising tensions between the U.S. and China.
During a weekly briefly, Chinese Commerce Ministry spokesman Gao Feng said the Trump administration must "show sincerity and correct their wrong actions" if the U.S. wants trade talks to continue.
"Negotiations can only continue on the basis of equality and mutual respect," Gao said, noting that China is closely monitoring developments and preparing a necessary response.
U.S. and China trade talks collapsed earlier this month as President Donald Trump followed through on a threat to raise tariffs on $200 billion worth of Chinese goods to 25 percent from 10 percent.
The Trump administration also blocked U.S. companies from doing business with Chinese telecom giant Huawei but recently gave the company a 90-day reprieve.
With both sides seemingly unwilling to back down, traders are becoming increasingly wary of the impact of the trade dispute on the global economy.
In U.S. economic news, the Labor Department released a report showing initial jobless claims unexpectedly edged lower in the week ended May 18th.
The report said initial jobless claims dipped to 211,000, a decrease of 1,000 from the previous week's unrevised level of 212,000. Economists had expected initial jobless claims to inch up to 215,000.
A separate report from the Commerce Department showed new home sales pulled back by much more than anticipated in the month of April.
The Commerce Department said new home sales plunged by 6.9 percent to an annual rate of 673,000 in April after spiking by 8.1 percent to an upwardly revised rate of 723,000 in March.
Economists had expected new home sales to drop by about 2.5 percent to a rate of 675,000 from the 692,000 originally reported for the previous month.
Energy stocks are helping to lead the way lower amid a steep drop by the price of crude oil. Crude for July delivery is plummeting $3.10 to $58.32 a barrel amid concerns about the outlook for global demand.
Reflecting the weakness in the energy sector, the Philadelphia Oil Service Index is down by 6.2 percent, the NYSE Natural Gas Index is down by 4.1 percent and the NYSE Arca Oil Index is down by 3.4 percent.
Considerable weakness has also emerged among computer hardware stocks, as reflected by the 3.4 percent nosedive by the NYSE Arca Computer Hardware Index.
Data storage company NetApp (NTAP) is posting a steep loss after reporting weaker than expected fiscal fourth quarter results and providing disappointing guidance.
Steel, semiconductor, and transportation are also seeing significant weakness on the day, while gold stocks are bucking the downtrend amid a jump by the price of the precious metal.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Thursday after closing mixed for several days. Japan's Nikkei 225 Index dropped by 0.6 percent, while China's Shanghai Composite Index tumbled by 1.4 percent.
The major European markets have also moved to the downside on the day. While the U.K.'s FTSE 100 Index has slumped by 1.6 percent, the German DAX Index is down by 1.7 percent and the French CAC 40 Index is down by 1.8 percent.
In the bond market, treasuries have moved sharply higher amid the sell-off on Wall Street. Subsequently, the yield on the benchmark ten-year note, which moved opposite of its price, is down by 6 basis points at 2.333 percent.
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