Overnight, data released in China showed industrial production by 5.4% in April on a year-over-year basis, notching the slowest pace of growth since May 2003. Economists polled by Refinitiv expected an expansion of 6.5%. Chinese retail sales also disappointed economists.
U.S. retail sales fell 0.2% in April, the Commerce Department said Wednesday. Economists polled by Dow Jones expected an increase of 0.2%.
The disappointing data from both countries comes as trade tensions between China and the U.S. have reignited. Earlier this week, China hiked tariffs on $60 billion worth of U.S. goods. The move came after the U.S. raised levies on $200 billion worth of Chinese imports. The U.S. also raised the possibility of slapping tariffs on an additional $300 billion in goods from China.
The rising trade fears sent equities reeling this week. The Dow and S&P 500 came into Wednesday’s session down 1.6% each while the Nasdaq had lost 2.3%.
Earlier this year, the S&P 500 and Nasdaq reached record highs in part because both China and the U.S. indicated progress was being made on the trade front.