The S&P/ASX200 was up 9.9 points, or 0.13 per cent to 7771.6 by lunchtime on Wednesday, as the broader All Ordinaries gained 7.7 points, of 0.1 per cent, to 7977.6.
"Tariffs and trade wars continue to dominate market talk," Moomoo market strategist Michael McCarthy said.
"The danger for markets is that America's strong language on trade may mean Beijing is in no hurry to help the (US President Donald Trump) down from his extreme position."
In the latest escalation, China has instructed Air China, China Eastern and China Southern to take no further deliveries of a planned 179 Boeing aircraft over the next three years, Bloomberg reports.
Boeing shares dropped 2.3 per cent from Monday's close while tech giant Nvidia fell six per cent after the chipmaker announced it would take a $US5.5 billion ($A8.7 billion) hit after the US government limited exports of its H20 artificial intelligence chips to China.
Nvidia had developed the chip specifically for China's markets in response to US limitations designed to keep the States ahead in the AI race.
Positive earnings from Bank of America and Citigroup helped limit US stock losses, as the S&P500 shed 0.2 per cent and the tech-heavy Nasdaq fell 0.1 per cent.
Back on the ASX, where eight of 11 local sectors were trading higher by lunchtime, with financials helping lift the bourse higher with a 0.9 per cent gain.
All big four banks were in the green, with Westpac taking the lead, up 1 .6 per cent as the other three improved by less than one per cent each.
The energy sector was underperforming the market, down 2.5 per cent, after the International Energy Agency projected global oil demand to grow at its lowest rate in five years amid ongoing trade tensions and a persistent supply surplus.
Brent crude futures slipped 0.9 per cent overnight to $US64.03.
Materials were also in the red as iron ore giants BHP, Fortescue and Rio Tinto gave up Tuesday's gains to slip 0.6 per cent, 1.3 per cent and 1.7 per cent, as Rio's first quarter production figures flagged a $150 million hit to export values due to wild storms earlier this year.Â
Gold miners and explorers were again performing well as the precious metal topped yet another all time high after topping $US3,266 an ounce.
The safe haven has been going from strength to strength as investors mull the impact of the trade war on global growth and in the US.
ANZ economists have cut their US growth forecast from 2.0 per cent to 1.5 per cent, and consider a 40 per cent chance of a recession in the world's largest economy.
"Amid a fluid and uncertain environment, near term downside risks to the economy have risen sharply, and we will closely monitor lead growth indicators," the economists wrote.
"Elevated uncertainty can lead to tighter bank lending conditions, consumption and investment."
The Australian dollar is buying 63.49 US cents, steady with its value at 5pm on Tuesday.
16°C