NEW YORK (Reuters) - The rally in U.S. stocks came to a halt on Thursday on new concerns that the U.S.-Chinese trade dispute will intensify, while economic turmoil in Argentina and Turkey sent those countries’ currencies tumbling.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., August 28, 2018. REUTERS/Brendan McDermid

Stock markets and major government bond yields have risen in recent weeks on hopes that a global trade war could be averted, particularly as leaders of the United States and Canada expressed optimism they could reach a new North American Free Trade Agreement by Friday.

Investor sentiment darkened, however, on the prospect that a new round of U.S. tariffs on Chinese goods may likely take effect in September.

President Donald Trump has told aides he is ready to impose tariffs on $200 billion more in Chinese imports as soon as a public comment period on the plan ends next week, Bloomberg News reported.

“It was an average sleepy summer afternoon going into the long (Labor Day) weekend until the latest Trump announcement of tariffs on China,” said Robert Phipps, director at Per Stirling Capital Management in Austin, Texas.

The Argentine peso tumbled again, even after the central bank hiked its benchmark interest rate by 15 percentage points to a dizzying 60 percent on Thursday in a bid to control rampant inflation and stem the currency’s slide. The peso finished at a record closing low of 39.25 per U.S. dollar.

The International Monetary Fund on Wednesday said it was studying a request from Argentina to speed up disbursement from a $50 billion loan program, but still wants Argentina to adopt stronger fiscal and monetary policies.

Turkey’s lira was pressured after reports that the country’s central bank deputy governor and rate-setter, Erkan Kilimci, is leaving the bank. Earlier this month, Turkey’s currency crisis sent the lira to a record low against the U.S. dollar and sparked concerns about emerging markets investments.

U.S. Treasury yields fell further on Thursday as investors moved to safe havens following the report of Trump’s tariffs plan and the Argentine peso’s tumble. The yields had declined earlier after a measure of underlying inflation just managed to hit the Federal Reserve’s 2 percent target.[US/]

Benchmark 10-year notes last rose 6/32 in price to yield 2.8604 percent, down from 2.882 percent late on Wednesday.

The dollar moved higher for the first time in five days on the renewed trade tensions and turmoil in emerging markets currencies.

The dollar index rose 0.07 percent, with the euro down 0.29 percent to $1.1672.

The Dow Jones Industrial Average fell 137.65 points, or 0.53 percent, to 25,986.92, the S&P 500 lost 12.91 points, or 0.44 percent, to 2,901.13 and the Nasdaq Composite dropped 21.32 points, or 0.26 percent, to 8,088.36.

The MSCI world equity index, which tracks shares in 47 countries, fell from a five-month high and was down 0.5 percent.

A pan-European stock index closed down 0.3 percent.

U.S. crude rose 0.9 percent to $70.13 per barrel and Brent was last at $77.84, up 0.49 percent, as crude shipments from Iran and Venezuela were disrupted and U.S. crude inventories dropped. [O/R]

(Graphic: World FX rates in 2018 tmsnrt.rs/2egbfVh)