Markets fall, rebound amid worries

U.s.-china trade war has investors eyeing havens of bonds, gold

NEW YORK — Stocks overcame a big loss Wednesday on Wall Street, but the market’s recovery left plenty of signs of worry among investors that the fallout from the trade war between the U.S. and China will spread.

A late-afternoon rally lifted most of the major stock indexes out of the red, reversing most of the early slide that pulled the Dow Jones Industrial Average down more than 580 points. Technology and consumer staples stocks powered much of the gains, offsetting losses in banks, energy companies and other sectors.

But the moves in the bond and commodities markets signaled that investors are nervous that the escalating trade war between the U.S. and China might derail the global economy.

Bond yields sank around the world, something that happens when investors see a weaker economy and low inflation on the way. The price of oil tanked, and the price of gold shot up to its highest level in six years, as traders sought ‘Investors

need to buckle in for some volatility here in the next couple of months.

safe-haven holdings.

“You did see buyers come back to the market, which is a good sign for the market in the near term,” said Lindsey Bell, investment strategist with CFRA Research. “Investors need to buckle in for some volatility here in the next couple of months.”

The S&P 500 index eked out a gain of 2.21 points, or 0.1 percent, to 2,883.98. The index had been down 2 percent during the heaviest bout

of selling.

The Dow dropped 22.45 points, or 0.1 percent, to 26,007.07. It had been down as much as 589 points.

The Nasdaq led the market’s upward swing, climbing 29.56 points, or 0.4 percent, to 7,862.83. The Russell 2000 index of smaller companies lost 1.40 points, or

0.1 percent, to 1,500.69.

The market has been roiled the past couple of weeks by growing anxiety as the U.S. and China clash over trade.

Last week, President Donald Trump rattled markets when he promised to impose 10 percent

tariffs next month on all Chinese imports that haven’t already been hit with tariffs of 25 percent. China struck back on Monday, allowing its currency, the yuan, to weaken against the U.S. dollar.

China stabilized the yuan Tuesday, and that helped lift U.S. stocks a day after they endured their worst day of the year. But the markets turned volatile again Wednesday after central banks in New Zealand, India and Thailand cut key interest rates.

The surprise rate cuts triggered a slide in bond yields around the world as investors scrambled for safety.