U.S. stock market futures plunged after the South China Morning Post reported on Wednesday evening that the U.S. and China made no progress in deputy level trade talks this week.
The report added that higher level talks including China's Vice Premier Liu He would only be one day now with the China delegation planning to leave Washington on Thursday instead of Friday as planned.
Dow Jones Industrial Average futures lost more than 300 points at one point and were last down 259 points, or 1%. S&P 500 and Nasdaq-100 futures were also down 1%. Shares of key stocks related to global trade declined in after hours with Apple and Caterpillar both down more than 1%.
The White House did not immediately respond to CNBC's request for comment. The issue of forced technology transfers, which China refused to put on the table, was the reason why talks were at a standstill, the report said.
U.S. stocks fell on Monday and Tuesday as investors lowered their expectations for a trade deal. Stocks rebounded on Wednesday, however, as traders grew more comfortable with the idea of a partial deal and the postponement of future tariffs, a scenario laid out in various media reports. Now even that seems out of reach, according to this report. Tariffs are set to increase on China imports on this coming Tuesday following a two-week delay seen as a goodwill gesture by President Donald Trump.
But on Tuesday of this week, the Department of Commerce added 28 new Chinese companies and agencies to a "blacklist." The move soured the tone of the lower level talks which were meant to set the table for an actual trade agreement later in the week.
— With reporting by Kevin Breuninger