US open: Stocks head south as Trump threatens more tariffs on Chinese imports

US stocks fell at the open on Friday as Donald Trump's unexpected threat of more tariffs on Chinese imports and a buffet of data weighed on sentiment.

As of 1550 BST, the Dow Jones Industrial Average was down 0.70% at 26,397.15, while the S&P 500 was 0.85% weaker at 2,928.59 and the Nasdaq Composite started out the session 1.34% lower at 8,0002.18.

The Dow opened 186.27 points lower after slipping into the red by the closing bell on Thursday, having opened higher after the Federal Reserve cut its target interest rates for the first time in more than a decade a day earlier.

Stocks turned south after Donald Trump threatened to slap an additional 10% tariff on $300bn worth of Chinese goods being imported into the US from 1 September.

The president broke a truce in the long-running trade war between the world's two largest economies with the move, which came just a day after US and Chinese officials wrapped up a short bout of trade talks in Shanghai.

The Chinese foreign ministry swung back at the White House on Friday morning, saying the US needed to lose its illusions, take some responsibility and get back on track to wrap up the trade war.

According to Reuters, China's spokesperson at the foreign ministry, Hua Chunying, said Beijing would be forced to take countermeasures if the US went ahead with the tariffs.

Trump later said that he was open to shelving the tariff if China upped its US agricultural purchases.

On the data front, the US jobs market continued to hum along at a solid pace last month, alongside a modest tick higher in the pace of wage growth and labour force participation.

According to the Department of Labor, nonfarm payrolls expanded by 164,000 in July, following on from an increase of 193,000 in the month before and narrowly ahead of the 160,000 gain economists had been anticipating.

Unemployment meanwhile held steady at 3.7%, even as the labour force participation rate rose from 62.9% to 63.0% or by 370,000 to 163.351m.

Looking at trade, America's shortfall on trade with the rest of the world widened in June, on the back of a big drop in goods exports.

According to the Department of Commerce, the trade deficit in goods and services increased from -$54.5bn for May to -$55.2bn in June.

In month-on-month terms, exports weakened by 2.1% to reach $206.3bn, hit by lower sales of gem diamonds, pharmaceutical preparations and computer accessories. Imports fell 1.7% on the month to reach $261.5bn.

Elsewhere, new orders for US-made goods rose less than expected last month, while unfilled orders continued to shrink, indicating a persistent weakness in the manufacturing sector.

Factory goods orders increased 0.6%, helped along by demand for machinery and transportation equipment, according to the Commerce Department. Data for May was revised down to show factory orders falling 1.3% instead of the 0.7% previously reported.

Lastly, US consumer sentiment remained flat throughout late July, as optimism around personal finances helped to offset uncertainties surrounding the US and China's trade spat.

The University of Michigan consumers sentiment index came to 98.4, unchanged from earlier on in July and up a touch from June's final reading of 98.2. Analysts had forecast a final July reading of 98.5.

In terms of corporate news, Chevron was down 1.76% in early trade despite seeing profits rise more than a quarter on the back of an increased output, while ExxonMobil was down 1.03% as news of a fire that has left 37 injured at one of the company's plants in Harris County, Texas offset its earnings beat.