Stocks are dropping sharply after President Trump threatened more tariffs against China. The escalation of tensions came as investors were hoping the long-running trade war between the world’s two biggest economic powers might be winding down. (May 6) AP, AP

Stocks extended losses in midday trading on Thursday as jittery investors worried about the outcome of trade talks between the U.S. and China, wondering whether higher tariffs on Chinese goods threatened by President Trump will go into effect on Friday.

It didn’t calm any nerves that the rhetoric between the two countries heated up in the hours ahead of negotiations.

The Dow Jones industrial average fell 367 points, or 1.41%, to 25,600 in midday trading,