Overnight on Wall Street, the Dow Jones Industrial Average slipped 32.14 points to close at 25,625.59 and the S & P 500 shed 0.5 percent to finish at 2,805.37. The Nasdaq Composite closed 0.6 percent down at 7,643.38
The decline was the benchmark 10-year rate hit its lowest level since Dec. 15, 2017. It's been at 2.3559 percent after seeing levels above 2.4 percent yesterday.
Investors are keeping an eye on rates after the 10-year fell below the 3-month rate last week for the first time since 2007. It is a development that investors call an inverted yield curve and is seen as an early indicator of recession
"The reason why it is so accurate is that when short term rates exceed long time rates, it is telling us that investors are "Kathy Lien, managing director of the foreign exchange strategy at BK Asset Management, wrote in an overnight note
" Investors has a hard time determining whether the drop in yields is positive or negative for stocks, "Lien said. "On the one hand, the lower rates are good for borrowing but, on the other hand, the yield curve inverted as a result of falling interest rates."
On the US-China trade front, U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Munchin set to resume negotiations with their Chinese counterparts in Beijing on Thursday to bid for a deal on trade.
Prior to the meeting, Reuters reported that Chinese side made unprecedented proposals on issues such as forced technology transfer, citing US Officials
"I think this time around … the context is different," Chou Chong, head of Asia Equity at Ostrum Asset Management Asia, told CNBC's "Street Signs" on Thursday. "The bag of tricks or what you call the easy hanging fruits that China had ̵
The U.S. dollar index, which tracks the greenback against a basket of peers, was at 96,873 after seeing a higher high of 96,976.
The Japanese yen traded at 110.17 against the dollar after seeing lows around 110.6 in the previous session. The Australian dollar has changed hands at $ 0.7095 following a steep decline from the $ 0.714 handle yesterday.
Oil prices declined in the morning of the Asian trading hours, with the Brent crude futures contract sliding 0.15 percent to $ 67.73 per barrel and the US crude futures fell 0.34 percent to $ 59.21 per barrel
– Reuters and CNBC's Fred Imbert contributed to this report