European and US markets on Thursday largely shrugged off another tit-for-tat exchange of tariffs by China and the United States as well as the latest American political turbulence.
Washington imposed levies on $16 billion in Chinese imports, sparking an immediate retaliation in kind from Beijing, which said it "firmly opposes the tariffs and has no choice but to continue to make the necessary counter-attacks."
The fresh tariffs came as US and Chinese officials held a second day of talks in their first meeting since June aimed at easing a row that has dragged on equities for months.
"Delegates from both sides will continue trade negotiations today but traders aren't overly optimistic," said market analyst David Madden at CMC Market UK.
Thursday's levies are the second round of such measures after the world's top two economies swapped tariffs on $34 billion of goods in July.
Wall Street notched modest declines, with the S&P 500 shedding 0.2 percent.
In Europe, Paris ended the day essentially flat, while London and Frankfurt lost 0.2 percent.
- 'Everybody would be very poor' -
Investors were also keeping tabs on developments in Washington after President Donald Trump's former attorney this week admitted a series of charges including campaign finance violations, while Trump's ex-campaign manager was convicted of fraud and other charges.
The double-whammy events have boosted speculation that Trump could be impeached, especially if Democrats dominate the congressional elections in November.
Trump warned Thursday the US economy would collapse if he were impeached and legal chaos roiling the White House has experts saying his presidency is under threat.
"I will tell you what, if I ever got impeached, I think the market would crash. I think everybody would be very poor," Trump said on "Fox and Friends."
Analysts said an impeachment in Washington would likely drag on stocks but would not wreak the devastation predicted by Trump.
CFRA chief investment strategist Sam Stovall predicted stocks could fall five to 10 percent, or even up to 20 percent, but "we do not think it will lead to recession and therefore will not result in a bear market."
On currency markets Thursday, the dollar sprang back to life after this week's travails, with Federal Reserve minutes signaling policymakers are ready to lift rates again as the economy continues to improve.
The greenback had taken a hit this week from Trump's comments criticizing the central bank's rate increases and accusing it of not backing his economic plan.
Analysts were looking ahead to an appearance on Friday by Federal Reserve Chair Jerome Powell at an annual central banker conference in Jackson Hole, Wyoming.
- Key figures around 2030 GMT -
New York - Dow Jones: DOWN 0.3 percent at 25,656.98 (close)
New York - S&P 500: DOWN 0.2 percent at 2,856.98 (close)
New York - Nasdaq: DOWN 0.1 percent at 7,878.46 (close)
London - FTSE 100: DOWN 0.2 at 7,563.22 (close)
Frankfurt - DAX 30: DOWN 0.2 percent at 12,365.58 (close)
Paris - CAC 40: DOWN less than 0.1 percent at 5,419.33 (close)
EURO STOXX 50: DOWN less than 0.1 percent at 3,419.26 (close)
Tokyo - Nikkei 225: UP 0.2 percent at 22,410.82 (close)
Hong Kong - Hang Seng: DOWN 0.5 percent at 27,790.46 (close)
Shanghai - Composite: UP 0.4 percent at 2,724.62 (close)
Euro/dollar: DOWN at $1.1543 from $1.1597 at 2100 GMT
Pound/dollar: DOWN at $1.2815 from $1.2911
Dollar/yen: UP at 111.23 yen from 110.56 yen
Oil - Brent Crude: DOWN five cents at $74.73 per barrel
Oil - West Texas Intermediate: DOWN three cents at $67.83