Though US markets have climbed off the lows from Thursday's session, it's becoming increasingly clear that Thursday will be another brutal day for US stocks as the arrest of Huawei CFO Wanzhou Meng (of which National Security Advisor John Bolton said he had been aware as he sat down for dinner across from Chinese President Xi Jinping on Saturday, though he said he didn't know if President Trump had been informed ahead of time) has threatened to wreck any progress on trade made over the weekend. And less than 24 hours after news of Wanzhou's arrest first broke (it went unreported for four days), more details surrounding a US investigation into Huawei's suspected violation of US sanctions on Iran are beginning to emerge.

After reporting in April that US federal prosecutors in Brooklyn had opened an investigation into Huawei over suspected sales to Iranian buyers of products that included American-made components, the Wall Street Journal on Thursday reported that a federally appointed monitor at British bank HSBC had flagged "suspicious" transactions involving Huawei that had been routed through the bank.

Consulting firm Exiger, which the bank hired in 2012 as part of a historic settlement (which also included a then-unprecedented $2 billion fine) where HSBC admitted to laundering money for Mexican drug cartels, flagged the transactions to US prosecutors after it raised suspicions about possible sanctions violations. The federally-mandated monitor had been appointed to oversee HSBC's AML controls, as well as the bank's monitoring for potential sanctions violations...and apparently the monitor did its job. HSBC isn't under investigation, WSJ noted. The bank was released from the monitoring agreement last year.

Canadian authorities on Dec. 1 arrested Huawei Chief Financial Officer Meng Wanzhou in Vancouver at the request of the U.S. for alleged violations of Iran sanctions, the latest move by Washington against the Chinese cellular-technology giant. The U.S. is seeking Ms. Meng’s extradition so she can appear in federal court in the Eastern District, The Wall Street Journal has reported. HSBC, one of several banks that did business with Huawei, is cooperating with investigators and isn’t a target in the Huawei probe, some of the people said. The British bank until recently was being formally monitored for its controls meant to catch money laundering and sanctions violations under a 2012 agreement with U.S. prosecutors.

Adding to concerns that Trump knew about Meng's arrest when he sat down with Xi (something that would likely anger the Chinese leader), Politico reported Thursday that White House officials knew about Meng's impending arrest ahead of time - though it's still unclear what President Trump knew when.

Beijing has been outraged by Meng's arrest. One government spokesman aid Thursday that neither US nor Canadian authorities had clarified their reasoning for arresting Meng. Foreign Ministry spokesperson Geng said Beijing will ask the US and Canada to release her. Detaining such a prominent executive risks being interpreted as a "direct attack" by Beijing.

"Detaining the person involved with no explicit reason certainly harms her human rights," Geng said. "In addition, like I said just now, neither the U.S. nor Canada has made any clarification on the reason for the detention so far."

Analysts are widely saying that whatever the impact of Meng's arrest on US-China relations might be, it likely won't be positive.

"Clearly, it will make the relationship worse," said Bill Reinsch, a senior adviser at the Center for Strategic and International Studies. "Their tendency is to assume anytime something like this happens that there are implications for the relationship - that it was done deliberately and that the whole thing is extralegal and it’s part of US policy."

Meanwhile, White House officials knew Canada was about to arrest a top executive of the Chinese telecom giant Huawei even as President Donald Trump and Chinese President Xi Jinping met over dinner last weekend in Argentina, National Security Adviser John Bolton told NPR Thursday.

During a Friday press conference, Canadian Prime Minister Justin Trudeau said his government had "a few days advanced notice" that the executive would be arrested. He added that the arrest was carried out without political considerations - but ducked a question about why Canada has continued to use Huawei products despite warnings from the US about their susceptibility to infiltration by the Chinese government.

"We are a country of an independent judiciary and the appropriate authorities took the decisions in this case without any political involvement or interference," he told reporters during a press conference in Montreal. "We were advised by them with a few days’ notice that this was in the works."

A bail hearing for Meng is set for Friday, said Ian McLeod, a spokesperson for Canada's Department of Justice. However, as Politico pointed out, extradition requests between Canada and the US are virtually automatic - unless a suspect faces the possibility of the death penalty (which doesn't apply in Meng's case).