Wall Street stocks sank on Thursday as worries that the United States and China would not be able to reach a trade deal increased concerns about slowing global economic growth. One key reason is that Trump said he did not plan to meet with Chinese President Xi Jinping before the March 1 deadline set by the two countries for reaching an agreement.

The equity markets have been under pressure after the European Commission slashed its euro zone growth forecasts for 2019 and 2020 due to an expected slowdown in the largest countries of the bloc, partly due to trade tensions.

Stocks pared losses toward the end of the session. The benchmark S&P 500 index hit a key technical level – 2,700 – that likely prompted buying. Still, among the S&P 500’s major sectors, only the defensive utilities and real estate indexes were positive, illustrating Thursday’s risk-off sentiment.

The Philadelphia SE Semiconductor Index fell 2.2 percent. Chipmakers get a large chunk of their revenue from Chinese customers.

Disappointing financial forecasts from several companies, including Twitter have also played a role.

More than half of S&P 500 companies have reported fourth-quarter results, with about 71 percent beating profit estimates, according to IBES data from Refinitiv. 

However, current-quarter earnings growth estimates have shrunk to 0.1 percent from 5.3 percent at the start of the year.

Energy stocks fell 2.1 percent, the largest percentage drop among S&P 500 sectors, as crude prices sank on worries of tapering demand because of trade tensions.

Twitter shares were down 9.8 percent after the social media company forecast that revenue in the first quarter would be weaker than expected and that its full-year operating costs would rise.

SunTrust rose 10.2 percent after the bank agreed to be bought for about $28 billion in stock by fellow regional lender BB&T Corp, whose shares rose 4.0 percent.

Approximately 7.82 billion shares change hands on the major domestic equity exchanges, as compared to the 7.49 billion share average over the past 20 trading days.

Unemployment Benefit Claims Fall

Applications for unemployment benefits fell from a 1-1/2-year high last week, but the decline was less than expected, suggesting some moderation in the pace of job growth.

Still, the Labor Department’s report on Thursday continued to point to strong job market conditions. That in turn will likely support the economy amid rising headwinds, including a fading fiscal stimulus boost and a trade war between Washington and Beijing, as well as slowing growth in China and Europe.

The Federal Reserve last week kept interest rates steady but said it would be patient in lifting borrowing costs further this year in a nod to growing uncertainty over the economy’s outlook. The Fed removed language from its December policy statement that risks to the outlook were “roughly balanced.”

According to Thursday’s report by the Labor Department, initial claims for state unemployment benefits fell by 19,000 claims to a seasonally adjusted 234,000 claims for the week ended February 2. The decline partially unwound the prior week’s increase, which raised claims to 253,000, the highest number since September 2017.

Claims that week were heightened by layoffs in the service industry in California, most likely striking teachers in Los Angeles.

A 35-day partial shutdown of the federal government as well as difficulties adjusting the data around moving holidays like Martin Luther King Jr. day, which occurred later this year than in recent years, also probably contributed to the spike in filings.

The longest shut down in history likely forced workers employed by government contractors to file claims for unemployment benefits. The shutdown ended on Jan. 25 after Trump and Congress agreed to temporary government funding, without money for his U.S.-Mexico border wall.

The Labor Department said no states were estimated last week. The four-week moving average of initial claims, considered a better measure of labor market trends as it irons out week-to-week volatility, rose by 4,500 claims to 224,750 claims last week. Claims by federal government workers, which are filed separately and with a one-week lag fell by 8,070 claims to 6,669 claims for the week ended January 26.

Thursday’s claims report showed the number of people receiving benefits after an initial week of aid fell by 42,000 claims to 1.74 million claims for the week ended January 26. These so-called continuing claims had hit a nine-month high in the prior week. The four-week moving average of continuing claims rose 4,250 claims to 1.74 million claims.