Following a series of reports earlier in the day claiming that China's trade delegation might leave Washington a day early, and also that Vice Premier Liu He, the leader of China's trade delegation, wasn't granted 'special envoy' status (which allows him to negotiate on President Xi's behalf), stocks were already in the red, and looking rather vulnerable, early in the US premarket session.
Then, along came the latest warning from the White House about the potential for policies limiting the flow of US capital into Chinese markets. The latest report warned that Washington was moving ahead with plans to study the potential for limiting investments by American pension funds in Chinese equities.
The plan would ostensibly be designed to limit vulnerable pension funds' exposure to opaque Chinese markets that are purportedly rife with fraud.
In reality, the plan is just another way to impose 'soft' capital controls to ratchet up the pressure on Beijing at a time when a weakening economy and currency have stirred up a wave of capital outflows, adding stress to the already heavily indebted Chinese financial system.