The tech-heavy Nasdaq fell more than 40 points.
The S&P 500 was down near 1%, or about 20 points, by the closing bell.
The Russell 2000 was in the red by the end of the day after hitting an all-time high yesterday.
Up north, the TSX was down more than 130 points, dragged down by the threat of a trade war between its southern neighbor and China.
1:00 PM: Selling gains momentum on Wall Street as US-China trade war escalates
Selling gained momentum midday Wednesday amid a broad selloff in ten of the major S&P sectors on escalating trade war tensions. The defensive utilities sector was the only one in the positive territory, with a 0.35% gain.
The Dow Jones Industrial Average index had its worst day in July, shedding 209.41 points, or 0.84% to 24,710.
The S&P 500, meanwhile, fell 14.84 points, or 0.54% to 2,778.74. The S&P industrials sector tumbled 1.22%, making it the biggest decliner and drag on the benchmark S&P.
The tech-laden Nasdaq shed 28 points to 7,731, led lower by Tesla which fell 1.7%. Micron Technology which depends heavily on China for its revenue plunged nearly 3% in line with other batthered American chip makers.
The Russell 2000 index of small-caps lost nearly 10.45 points, or 0.6% to 1,686.
10:00 AM: US stocks trade lower, dragged back by trade tensions between US and Beijing
US stocks opened in a sea of red on Wednesday as investors reacted with dismay to President Trump’s plan to introduce new tariffs on some US$200bn worth of Chinese imports.
The White House has again rattled the markets, with the release late on Tuesday of a list of Chinese goods that will be slapped with 10% tariffs. The tariffs are set to be subject to a two-month long review as well as congressional hearings at the end of next month.
Elsewhere, the tech-laden Nasdaq shed 28 points to 7,731, led lower by chipmakers which are set to suffer from the Beijing-US trade wars while the Russell 2000 index of small-caps lost nearly 10 points to 1,686.
Up in Canada, Toronto’s TSX dropped by 93 points to 16,455, as a dip in oil prices put pressure on energy and gas stocks.
Investors are also expecting an interest rate decision by the Bank of Canada, which is expected to raise rates to 1.5% from 1.25%.