US stocks fell on Friday, as investors worried over the possibility of a long-drawn-out US-China trade dispute, but hopes that the two sides could still reach a last-minute deal limited losses.

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President Donald Trump said he was in "absolutely no rush" to finalize a trade agreement with China, after the United States increased duties to 25% on $200 billion worth of Chinese goods overnight.

But even as Beijing threatened retaliation, negotiators in Washington agreed to stay on for a second day, raising expectations that a deal would be reached.

"Everyone knows that the United States and China are talking, and are looking at the tariffs as a bargaining chip. It's all about leverage and who outmaneuvers whom," said Andre Bakhos, managing director at New Vines Capital LLC in Bernardsville, New Jersey.

"In the end Trump will get a deal done, but in the interim we have to put up with his way of doing it. We are going to have a lot of volatility, until we have clarity."

Boeing Co, the single largest US exporter to China, declined 0.7%, while Caterpillar Inc dropped 0.9%.

At 9:40 a.m. ET, the Dow Jones Industrial Average was down 77.76 points, or 0.30%, at 25,750.60. The S&P 500 was down 8.18 points, or 0.28%, at 2,862.54 and the Nasdaq Composite was down 20.37 points, or 0.26%, at 7,890.22.

The spike in tensions has triggered a flight to safety and triggered a 2.8% drop in the S&P 500 so far this week, setting the benchmark index to post its worst weekly decline since December.

Global equities have seen outflows of $20.5 billion in the past week as "trade deal trauma" pushed more money into bonds, Bank of America Merrill Lynch said in a report.

Longer-dated US Treasury yields were hovering at five-week lows due to the trade jitters and tame inflation data.

Technology stocks fell 0.33%, and weighed the most on the S&P, dragged down by shares of iPhone maker and a plunge in Symantec Corp.

The antivirus software maker tumbled 15.2% after issuing a profit warning and unexpectedly announcing that its chief executive officer would step down.

Amid market uncertainty, ride-hailing company Uber Technologies Inc is set to make its market debut after raising $8.1 billion in the largest U.S. IPO since 2014.

Booking Holdings rose 4 percent, the most on the S&P and Nasdaq indexes, after the online travel and restaurant reservation provider reported better-than-expected room bookings in the latest quarter.

Declining issues outnumbered advancers for a 1.47-to-1 ratio on the NYSE and for a 1.62-to-1 ratio on the Nasdaq.

The S&P index recorded two new 52-week highs and three new lows, while the Nasdaq recorded 14 new highs and 33 new lows.

First Published:May 10, 2019 7:24 PM IST