US companies are watering down their spending plans as the threat of slowing global growth and the trade war sap business confidence.

Capital expenditure, or capex, is set to grow 3.5 per cent this year, a sharp drop from the 4.2 per cent anticipated just four months ago, according to Citi analysts. The downward revisions reflect the spending plans of 714 listed US companies, excluding financial groups, and echo the drumbeat of dire sentiment data that began to appear late last year indicating businesses would curtail their investments.

The revisions come at a pivotal time for markets as the trade war between the US and China and a string of poor economic data have triggered a surge in market volatility and sent investors rushing into safe assets such as US government bonds.