Michael Nagle | Bloomberg | Getty Images
Caution tape hangs near the steps of Federal Hall across from the New York Stock Exchange in New York.
Treasury Secretary Steven Mnuchin is leading a group of Trump administration officials to meet with Chinese Vice Premier Liu He and discuss trade between the two nations.
Shortly before the talks were set to take place in Beijing, the mood between the world's two largest economies worsened amid reports the U.S. administration is considering taking executive action to restrict some Chinese firms' ability to sell telecoms equipment.
On Wednesday night, President Donald Trump said in a tweet the group of administration officials "is in China trying to negotiate a level playing field on trade! I look forward to being with President Xi in the not too distant future."
"Trump's 'level playing field' implies a harder line and general sentiment around the talks is going to be volatile," said Tom Essaye, founder of The Sevens Report. "Chances of a grand bargain are virtually nil but the market does want a de-escalation of trade tensions."
Meanwhile, Iran Foreign Affairs Minister Mohammad Javad Zarif said the country will not renegotiate the nuclear deal it struck with the U.S. in 2015. Zarif said in a YouTube video: "Iran will not renegotiate what was agreed years ago and has been implemented ... also we will reject any ratification of it."
Crude futures briefly spiked before trading 0.8 percent lower at $67.39 per barrel. Gold futures jumped 0.7 percent to $1,314.10 per ounce. The precious metal is often seen as a safe-haven trade.
Wall Street also paid attention to Washington amid more news regarding Trump's legal...