Stocks fell on Thursday, resuming a sell-off this week, after President Donald Trump said China "broke the deal," fueling worries the U.S. and China will be unable to hatch a trade agreement before new tariffs go into effect at midnight on Thursday.

The Dow Jones Industrial Average fell about 420 points on Thursday, while the S&P 500 dropped 1.2 percent and the Nasdaq lost 1.5 percent. The Dow is down more than 700 points and the S&P 500 has lost around 3.6 percent this week after Trump threatened to raise tariffs on more Chinese goods over the weekend.

Liu He, China's vice premier and top trade negotiator, will dine with U.S. Trade Representative Robert Lighthizer and other U.S. officials Thursday evening in Washington, just hours before the new tariffs are imposed. Liu is not expected to meet with Trump on Thursday, CNBC reported.

China claimed it will retaliate if the higher levies are imposed. Despite Trump's amped-up rhetoric, the White House claimed on Wednesday China still wants to make a deal, which kept the market temporarily afloat for a day.

Thursday is "a pivotal day," said Ed Mills, public policy analyst at Raymond James, in a note. "We believe Chinese officials will be looking to delay Friday's tariff increase in order to continue conversations as to the appropriate level of commitments in key areas. However, the market reaction over the last couple days gives Trump some leeway to maintain an aggressive tone."

Chipmakers, sensitive to higher tariffs, took a hit on Thursday as Nvidia and Micron dropped about 4.4 percent and 3.5 percent respectively. Apple tumbled by 2.3 percent.

The CBOE Volatility Index, also known as the "fear gauge," hit a fresh high of 23.38 on Thursday, its highest level since Jan. 4.