Wall Street opened lower on Friday as U.S.-China tensions and fears over mounting COVID-19 cases weighed on investor sentiment, erasing all gains for the benchmark S&P 500 index so far this week.

The Dow Jones Industrial Average traded 166 points lower, or 0.6 percent. The S&P 500 sank by 0.7 percent and the Nasdaq Composite dropped by 1.5 percent. 

Earlier this week, the Trump administration found a new way to provoke China by demanding that the country shut down its consulate in Houston, Texas. China later retaliated and ordered the United States to close its consulate in Chengdu, Sichuan Province.

China's stock market also dipped, with the Shanghai Composite dropping by 3.9 percent overnight. 

Read more: World shares retreat on rise in U.S.- China tensions

(With inputs from Reuters)