After ending the previous session notably, stocks have given back some ground during the trading day on Wednesday. Selling pressure has remained somewhat subdued, however, limiting the downside for the major averages.
Currently, the major averages remain stuck in negative territory. The Dow is down 69.01 points or 0.3 percent at 25,808.32, the Nasdaq is down 25.81 points or 0.3 percent at 7,759.91 and the S&P 500 is down 5.68 points or 0.2 percent at 2,858.68.
The moderate weakness on Wall Street comes as traders continue to worry the trade dispute between the U.S. and China is escalating into a full-fledged trade war.
A report from the South China Morning Post said Chinas is re-examining the entire bilateral economic relationship between the U.S. and China.
The SCMP said Chinese government advisers are highlighting the risk of sourcing critical supplies from an increasingly hostile U.S. following the Trump administration's recent move to blacklist Chinese tech giant Huawei.
Mei Xinyu, a fellow at the research institute under China's Ministry of Commerce, told the SCMP that Beijing should prepare for the worst-case scenario to defend its rights in climbing up the global value chain through technological catch-up.
"Even if a deal is reached, it could be torn apart [by President Donald Trump] easily at any time," Mei said, comparing the current trade talk deadlock to the Panmunjom peace talks during the Korean War.
Adding to the trade concerns, Treasury Secretary Steven Mnuchin told CNBC's Ylan Mui the U.S. has no plans to go to Beijing to resume trade negotiations.
Trading activity has remained relatively light, however, with traders looking ahead to the release of the minutes of the latest Federal Reserve meeting later in the day.
The minutes may shed additional light on the outlook for interest rates but could also be viewed as old news considering the constantly shifting developments on the trade front.
Sector News
Oil service stocks continue to see substantial weakness in mid-day trading, with the Philadelphia Oil Service Index plunging by 3.1 percent.
The sell-off by oil service stocks comes as the price of crude oil for July delivery is tumbling $1.44 to $61.69 a barrel following the release of a report showing an unexpected weekly increase in crude oil inventories.
Considerable weakness also remains visible among semiconductor stocks, as reflected by the 1.5 percent drop by the Philadelphia Semiconductor Index.
Qualcomm (QCOM) is posting a steep loss after a federal judge ruled the communications chip maker violated antitrust law.
Natural gas, transportation, and computer hardware stocks are also seeing notable weakness on the day, while some strength has emerged among utilities stocks.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region closed mixed for the fifth consecutive session on Wednesday. Japan's Nikkei 225 Index inched up by 0.1 percent, while China's Shanghai Composite Index fell by 0.5 percent.
The major European markets also finished the day mixed. While the French CAC 40 Index edged down by 0.1 percent, the U.K.'s FTSE 100 Index crept up by 0.1 percent and the German DAX Index rose by 0.2 percent.
In the bond market, treasuries are rebounding after edging lower over the two previous sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 3.5 basis points at 2.391 percent.
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