Major U.S. stock indexes all recorded declines in the last session as markets digested trade-related developments out of Washington, with the Dow Jones industrial average falling 1 percent, or 248.91 points, to close at 24,758.12.
Shares of Boeing fell 2.5 percent following news of potential trade measures, which could include investment restrictions and indefinite tariffs, being considered against China by President Donald Trump. Trump could implement tariffs on $60 billion worth of Chinese goods, according to Reuters.
The White House on Wednesday also said the Trump administration wanted China to reduce its trade surplus with the U.S. by $100 billion, and not the $1 billion figure Trump had tweeted last week.
Asian stock indexes had closed lower in the last session amid talk of potential additional U.S. tariffs. That overshadowed the release of better-than-expected industrial output and fixed-asset investment data out of China.
The looming possibility of a trade war saw bond yields dip. The yield on the 10-year U.S. Treasury note stood at 2.8134 percent at 3:09 p.m. HK/SIN after touching as low as 2.797 percent earlier. Yields trade inversely to bond prices.
Against the safe-haven yen, the dollar extended losses to 105.99 amid trade-related worries, below the 106.2 handle seen in the last session.
The dollar index, which tracks the greenback against a basket of rival currencies, stood at 89.693 at 2:36 p.m. HK/SIN.
Larry Kudlow, the Trump administration's newly tapped top economic advisor, on Wednesday told CNBC that "a great country need[ed] a strong currency."
Those remarks, however, were unlikely to lift the dollar much given how concerns over the possibility of a trade war continued to simmer in the background, wrote Mizuho Bank economist Zhu Huani in a note.
In corporate news, Samsung Electronics said it would start constructing a memory chip production line in China at the end of the month in a bid to enhance its NAND flash technology, Reuters reported. Samsung shares were off by 0.43 percent by the end of the day.
Elsewhere, Cathay Pacific jumped 4.64 percent by 3:04 p.m. HK/SIN after the airline on Wednesday announced a loss of 1.26 billion Hong Kong dollars ($160 million) in 2017 — smaller than the HK$2.15 billion forecast in a Reuters poll.
Oil prices held onto overnight gains after data on Wednesday showed U.S. crude inventories rose more than expected, while gasoline inventories dropped more than forecast. U.S. crude futures edged up 0.11 percent to trade at $61.03 per barrel and Brent crude futures were nearly flat at $64.90.