Market focus is largely attuned to global trade developments, following a report that Trump could be preparing to step up a trade dispute with China. Investors were also concerned about emerging market currencies, after Argentina's peso continued to fall in the previous session.
On Thursday, Bloomberg reported that the U.S. administration was on standby to impose more tariffs on $200 billion worth of goods from Beijing as soon as next week. The president also threatened to withdraw the U.S. from the World Trade Organization, (WTO) if they do not "shape up," escalating fears over global trade turmoil.
In markets overseas, most Asia-Pacific indexes posted losses as concerns over the trade war between the States and China resurfaced. On Wall Street, stocks were mostly lower around Europe's close as the U.S. and Canada neared a key trade agreement deadline with no apparent resolution.
Friday marks the U.S.-imposed deadline for a new trade deal to be secured by the U.S., Mexico and Canada. While Mexico and the U.S. have already announced a bilateral trade deal, Canada has yet to secure its place. Representatives from both Canada and the U.S. worked until late Thursday to devise an alternative to the current NAFTA deal. However, Canada's trade minister has stated that they are working to "get the right deal, not any deal," according to Reuters.
On the data front, euro zone inflation slowed in August, supporting the European Central Bank's (ECB) view that a recent spike may prove to be short-lived. Inflation in the 19 countries sharing the single currency eased to 2 percent this month, down from 2.1 percent in July, according to data from Eurostat. The ECB targets inflation at just below 2 percent.