The S&P 500 moved lower for the third consecutive session on Wednesday, losing 0.6%, as fears over a potential trade war continued linger. The Dow Jones Industrial Average did even worse, losing 1.0%, while the tech-heavy Nasdaq Composite held up relatively well, shedding just 0.2%.

Coming off last week's decision to impose tariffs on steel and aluminum imports, President Trump is now reportedly seeking to hit China with steep tariffs and investment restrictions that could be applied as early as next week. Those tariffs, which are expected to total as much as $60 billion, would initially be targeted towards information technology, telecoms, and consumer electronics as punishment for alleged intellectual property theft, but could eventually be much broader.

The White House also clarified a tweet that the president released last week, saying that Mr. Trump is looking to reduce China's trade surplus with the U.S. by $100 billion, and announced that longtime CNBC personality Larry Kudlow will replace Gary Cohn as President Trump's top economic advisor, as expected.

Stocks opened Wednesday's session with modest gains despite the continued tariff talk, but started moving lower almost immediately. The S&P 500 tested its 50-day simple moving average several times throughout the session, but buyers never let the index get too far below the key technical level. The benchmark index traded as low as 2744, but finished two points above its 50-day simple moving average at 2749.

Investors had a sizable batch of economic data to digest on Wednesday, including the February readings for the Producer Price Index and Retail Sales. Retail Sales disappointed, declining for a third straight month (-0.1% actual vs +0.3% Briefing.com consensus), but the January decrease was reduced to 0.1% from 0.3%.

The Producer Price Index, meanwhile, rose 0.2% in February, more than the Briefing.com consensus of 0.1%, and the core Producer Price Index also jumped 0.2%, as expected. Those monthly changes leave the PPI up 2.8% year over year (up from 2.7% in January) and the core CPI up 2.5% year over year (up from 2.2% in January).

All in all, Wednesday's data didn't give investors any reason to believe the Fed will hike rates more than three times this year. The year-over-year uptick in producer prices is notable, yet concerns about that trend were tempered somewhat by the realization that Tuesday's release of the Consumer Price Index for February didn't show any worrisome pass through effects to consumers.

Investors also received the Business Inventories report for January, which increased 0.6% as expected, but it didn't have much impact on trading.

U.S. Treasuries recorded their third consecutive advance on Wednesday, settling near session highs. The benchmark 10-yr yield, which moves inversely to the price of the 10-yr Treasury note, declined four basis points to 2.82%, while the 2-yr yield slipped just one basis point to 2.25%, resulting in a flattening of the yield curve.

That flattening weighed on financials, as lenders rely on the difference between what they spend on deposits and what they charge for loans. The S&P's financial sector lost 1.2%, finishing alongside industrials (-1.1%), materials (-1.3%), and consumer staples (-1.3%) at the bottom of the sector standings.

Two of eleven sectors finished in the green though--the rate-sensitive utilities (+1.0%) and real estate (+0.1%) spaces.

In corporate news, Signet Jewelers (SIG 38.22, -9.69) tumbled 20.2%, hitting its lowest level in more than six years, after the diamond retailer reported a 5.2% decline in same store sales for the fourth quarter and lowered its guidance for fiscal year 2019. Meanwhile, Broadcom (AVGO 260.59, -0.63) lost 0.2% after terminating its offer to acquire Qualcomm (QCOM 60.12, +0.42) following an order from President Trump.

Looking ahead, investors will receive a big batch of economic data on Thursday, including export and import prices for February, the weekly Initial Claims report (Briefing.com consensus 226K), the Empire State Manufacturing Survey for March (Briefing.com consensus 15.0), the Philadelphia Fed Index for March (Briefing.com consensus 23.7), and the NAHB Housing Market Index for March (Briefing.com consensus 72). All but the NAHB Housing Market Index will be released at 8:30 AM ET; the NAHB Index will be released at 10:00 AM ET.

• Nasdaq Composite: +8.6% YTD
• S&P 500: +2.8% YTD
• Dow Jones Industrial Average: +0.2% YTD
• Russell 2000: +3.2% YTD
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• Headlines provided by Briefing.com
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