The major domestic equity indexes ended the trading day on Wednesday in negative territory after the White House sought to impose fresh tariffs on China, thereby intensifying fears of a trade war that could raise costs and hurt corporate sales overseas.

The Trump administration is pressing China to cut its trade surplus with the United States by $100 billion, the White House said Wednesday. As a result, Trump is looking to levy tariffs on up to $60 billion of Chinese imports, targeting the technology, telecom and apparel sectors.

With the close of earnings season, the latest developments in Washington play an even more prominent role. Trump has already imposed tariffs on steel and aluminum imports as well as on solar panels and washing machines, sparking threats of retaliation from some trade partners.

Boeing, which is particularly vulnerable to retaliation, closed down 2.5 percent, leading the losers on the Dow.

Stocks briefly pared losses after economic analyst and commentator Larry Kudlow, who has supported free trade measures in the past, said on Wednesday he had accepted an offer to replace Gary Cohn as the White House’s top economic adviser. In an interview with CNBC just before the market close, Kudlow said he believed tougher trade measures against China were warranted.

Also weighing on investor sentiment was data that showed U.S. retail sales fell for a third straight month in February, pointing to a slowdown in economic growth in the first quarter.

Financial stocks fell 1.2 percent, tracking a decline in bond yields.

Signet Jewelers fell 20.2 percent after the company gave a disappointing full-year earnings forecast.

Ford rose 2.2 percent after Morgan Stanley upgraded the stock to “overweight” from “underweight” and raised its earnings estimate on the automaker.

Approximately 6.53 billion shares changed hands on the major domestic equity exchanges on Wednesday, as compared to a 7.14 billion share average over the past 20 trading days.

Retail Sales Falter

Retail sales faltered for a third straight month in February as households cut back on purchases of motor vehicles and other big-ticket items, prompting lower first-quarter economic growth forecasts.

Despite signs of cooling in consumer spending, inflation pressures are steadily building, which should allow the Federal Reserve to raise interest rates next week. Other data on Wednesday showed underlying producer prices rose solidly in February, driven by strong gains in the cost of services such as hotel accommodation, airline fares and hospital inpatient care.

The sustained decline in retail sales is surprising as consumer confidence is at a more than 17-year high in the wake of a $15 trillion income tax cut package and a labor market that continues to churn out jobs. Economists said consumers boosted spending in the fourth quarter in anticipation of the lower taxes.

The Commerce Department said retail sales slipped 0.1 percent last month. January data was revised to show sales dipping 0.1 percent instead of falling 0.3 percent as previously reported. It was the first time since April 2012 that retail sales have declined for three straight months.

Excluding automobiles, gasoline, building materials and food services, retail sales edged up 0.1 percent last month after being unchanged in January. These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product.

Auto sales fell 0.9 percent in February after a similar drop in January. There were also declines in sales at gasoline stations, furniture, health and personal care and electronics and appliance stores.

But there were some pockets of strength. Sales at building material stores surged 1.9 percent last month. Receipts at clothing stores gained 0.4 percent and sales at online retailers rose 1.0 percent. Consumers also spent more at restaurants and bars and splurged on sporting goods and hobbies.

Because of the weak core retail sales at the start of the year, the Atlanta Fed slashed its GDP growth forecast to a 1.9 percent annualized rate from a 2.5 percent pace.

Data forecasting firm Macroeconomic Advisers cut its estimate by four-tenths of a percentage point to a 1.7 percent rate, also considering revisions to January retail inventory data.

The economy grew at a 2.5 percent pace in the fourth quarter, the government reported last month. But revisions to December data on construction spending, factory orders and inventories have suggested the fourth-quarter growth estimate could be raised to a 3.1 percent pace. The government will publish its third estimate for fourth-quarter GDP growth later this month.

Producer Prices Rise

The Labor Department reported on Wednesday that a key measure of underlying producer price pressures, excluding food, energy and trade services, rose 0.4 percent last month, matching January’s gain.

The year-on-year increase of the so-called core PPI to 2.7 percent, was the largest gain since August 2014, up from 2.5 percent in January. The increase in underlying wholesale prices supports views that consumer inflation will pick up this year.

The Fed’s preferred inflation measure, the personal consumption expenditures (PCE) price index excluding food and energy, has undershot its target since May 2012.