Friday's early trade: Stocks dip as US-China tensions add to economic woes

US stock indexes dropped on Friday as Sino-US tensions weighed on markets struggling to gauge the pace of economic recovery from the coronavirus. President Donald Trump's statement on China's plan for a national security law in Hong Kong on Thursday raised concerns over Washington and Beijing possibly reneging on their Phase-1 trade deal.

Fears of a renewed trade war cut short Wall Street's April rally that was powered by optimism over a potential COVID-19 vaccine and the US economy gradually emerging from the lockdowns.

The three main US stock indexes have kept to a tight range in May, but are still on course for weekly gains between 2.5% and 2.8%.

"It's a bit of a push-pull as there's some positive news from a healthcare perspective at least, but then we also have the rhetoric ramping up with China," said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.

At 11:23 a.m. ET, the Dow Jones Industrial Average was down 137.22 points, or 0.56%, at 24,336.90, the S&P 500 was down 9.75 points, or 0.33%, at 2,938.76 and the Nasdaq Composite was down 18.07 points, or 0.19%, at 9,266.81.

Eight of the 11 major S&P 500 sub-indexes were trading lower, led by energy as oil prices sank 5%.