On the other hand, boosted by upbeat earnings from Motorola and T-mobile earlier this week, the S&P 500 Telecom Service Sector extended its upside and closed with a 1% gain.
"This will eventually matter greatly to USA markets".
Markets in Europe were also turbulent with Germany's DAX falling two percent, French CAC 40 falling nearly two percent, and Britain's FTSE 100 declining 0.8 percent. "It's been a slow, steady climb, led by an increasingly smaller number of companies", said Rick Meckler, partner at Cherry Lane Investments, a family investment office in New Vernon, New Jersey.
A drop in technology shares added to the day's bearish tone.
The S&P 500 index fell 4.12 points, or 0.1 percent, to 2,853.58.
At 9:48 a.m. EDT the Dow Jones Industrial Average was down 158.88 points, or 0.62 percent, at 25,350.35, the S&P 500 was down 13.35 points, or 0.47 percent, at 2,840.23 and the Nasdaq Composite was down 31.69 points, or 0.40 percent, at 7,860.09.More news: Israeli Airstrikes Hit Gaza After Hamas Launches Rocket Attacks
Rite Aid fell 10.9 percent after the drug store chain and US grocer Albertsons Cos agreed to terminate their merger agreement.
Chip stocks fell after Morgan Stanley downgraded the US semiconductor industry.
The gains come as the latest data pointed to the strength in the labor market, underscoring the health of the economy despite ongoing trade tensions.
Declining issues outnumbered advancers for a 2.34-to-1 ratio on the NYSE.
"There is low volatility in the markets as the S&P and Nasdaq are just below all-time record highs, and it seems like markets are complacent right now".
Oil prices were down slightly as the escalating China-U.S. trade dispute cast doubt on the outlook for crude demand.