Major US stock indexes fell sharply after CNBC reported that a meeting between US President Donald Trump and Chinese President Xi Jinping is unlikely before the March deadline set by both countries to conclude a trade deal.

An informed source told CNBC that the meeting of the two leaders seems to be "extremely unlikely." China and the United States must close a deal in early March. Otherwise, additional tariffs for Chinese goods come into force. The source said that the meeting of Xi Jinping and Donald Trump could take place soon after the deadline, but noted that both sides have too much work to do.

Earlier on Thursday, White House Economic Adviser Larry Cudlow said that China and the United States are still far from concluding a trade deal. “We have yet to overcome a great distance,” said Kudlow in an interview with Fox Business, referring to the ongoing trade negotiations between the two largest economies in the world. Cudlow added that President Donald Trump is "optimistic about a potential trade deal."

The focus of market participants was also a report by the Ministry of Labor, which showed that the number of Americans who submitted initial applications for unemployment benefits fell last week from an almost 1.5-year high, which indicates continued strength in the labor market. According to the data, the initial claims for unemployment benefits fell from 19,000 to 234,000, taking into account seasonal fluctuations for the week ending February 2. Economists predicted that the number of applications for benefits would fall to 221,000.

Most of the components of DOW finished trading in the red (27 out of 30). IBM Corp’s shares were outsiders. (IBM, -2.23%). The growth leader was Walmart Inc. (WMT, + 1.04%).

Almost all sectors of the S & P recorded a decline. The largest decline was in the raw materials sector (-1.9%). Only the utility sector grew (+ 0.7%).

At the time of closing:

Dow 25,169.53 -220.77 -0.87%

S & P 500 2,706.05 -25.56 -0.94%

Nasdaq 100 7,288.35 -86.93 -1.18%