Trump said he would decide on more China tariffs "probably right after the G20," which follows his threat overnight to hit tariffs on "at least" another $300 billion worth of Chinese goods.
"It feels like an escalation of tensions and may be an elongated trade war and we might have to recalibrate lower," said Art Hogan, chief market strategist at National Securities in New York.
"We're up significantly in two days, and at that place it doesn't take much to roll markets over."
The trade-sensitive industrial sector fell 0.3%, the most among the five major sectors trading lower.
Adding to the concerns, the European Central Bank marginally cut its growth forecasts for the next two years, acknowledging the risk that Europe's slowdown will be longer and deeper than expected.
Markets have been roiled by worries of a global economic slowdown triggered by the ongoing U.S.-China trade spat and the pervasive uncertainty has led top Federal Reserve officials, including Chairman Jerome Powell, to hint at a rate cut.
"There is an overarching belief that Chairman Powell is willing to, if need be, lower rates in the near term," said Hogan.
The S&P remained on pace for its third straight session of gains, mainly on hopes of a more accommodative Federal Reserve.
At 9:45 a.m. ET, the Dow Jones Industrial Average was up 28.02 points, or 0.11%, at 25,567.59, while the S&P 500 was up 2.06 points, or 0.07%, at 2,828.21. The Nasdaq Composite was down 5.19 points, or 0.07%, at 7,570.29.
Energy stocks, the sector hardest hit by the recent escalation in trade tensions, rose 1.3%, the most among the major S&P sectors, as oil prices gained.
The biggest boosts to markets were oil majors Exxon Mobil Corp and Chevron Corp, both up about 1.5%.