U.S. stocks pare losses as tech gains

U.S. equities closed up from the lows of the day after a late rally in large technology stocks helped to propel the Nasdaq 100 higher in what was the biggest reversal for the index since April.

The S&P 500 and Dow Jones Industrial Average ended in negative territory. Financial markets remained volatile on bets that the trade truce between China and the U.S. won’t last after the arrest of Huawei’s chief financial officer. Bank shares in the S&P 500 fell as much as 3.9 percent before closing down 1.4 percent, as Treasury yields slid to the lowest since August.

Helping to ease anxiety were comments from two regional Federal Reserve presidents urging policy caution from the U.S. central bank amid mounting economic uncertainties and recent volatility in financial markets.

“The biggest qualm is the trade war escalating and this is haunting the markets,” said Naeem Aslam, chief market analyst at Think Markets U.K. in London, in an email. “It is arduous to find bulls in the market and it seems to me that this game is about to become uglier.”

Oil continued to be a drag on financial markets, with West Texas Intermediate back to $51 a barrel as OPEC ministers seek a deal to cut output. Energy producers in the S&P 500 sank more than 3 percent, and emerging-market equities plunged.

Traders pointed to a spate of other catalysts for the renewed risk-off tone that’s gripping financial markets. Bank of Japan Governor Haruhiko Kuroda said economic risks from abroad could be severe, and the Fed’s Beige Book report showed fading optimism over growth prospects at U.S. firms even as most districts continued to report a modest expansion. The pound drifted as U.K. Prime Minister Theresa May searched for a compromise to avoid a crushing defeat on her Brexit deal in a key vote in Parliament next week.

Whether or not it triggered the slide, Canada’s arrest of the Huawei CFO and reports it may extradite her to the U.S. are a blow to already fragile sentiment, just days after an apparent breakthrough on trade between America and China. The start of the futures session was marred by a sudden and unexpected plunge that sent a shock wave across equity markets.