NEW YORK (AP) — U.S. stocks are giving back some of their historic gains from the day before as Wall Street weighs a global trade war that has cooled in temperature but is still threatening the economy. The S&P 500 was down 2.3% early Thursday, a day after surging 9.5% following President Donald Trump’s decision to pause many of his tariffs worldwide. The Dow Jones Industrial Average was down 685 points, and the Nasdaq composite was down 2.9%. Even a better-than-expected report on inflation wasn’t enough to get stocks to add to their gains from the day before, including the S&P 500’s third-best since 1940.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

Markets on Wall Street Thursday were poised to gave back some of the historic gains made a day earlier when President Donald Trump paused his latest tariff hikes on U.S. trading partners, with the exception of China.

Futures for the S&P 500 were down 1.7% before the bell, while futures for the Dow Jones Industrial Average dropped 1.4%. Nasdaq futures gave back 2%.

It’s been a wild couple of weeks on Wall Street with Trump’s tariff announcements, reversals and retaliation from U.S. trading partners. That volatility seems unlikely to change in the coming weeks with the U.S. and China still locked in a tit-for-tat tariff battle and earnings season kicking off on Friday with the latest results from some of the nation’s biggest banks.

In early trading Thursday, technology stocks were the biggest drag on markets, followed by the industrial and the financial sectors.

Coming later in the morning are the U.S. government’s latest consumer inflation data and the weekly layoffs report.

On Wednesday, the S&P 500 surged 9.5%, its third-best day since 1940. The index is still below where it was when Trump announced his sweeping set of tariffs last week.

The Dow Jones Industrial Average shot to a gain of nearly 3,000 points, or 7.9%. The Nasdaq composite leaped 12.2%.

Investors went “from fear to euphoria,” Stephen Innes, managing partner at SPI Asset Management, said in a commentary.

“It’s now a manageable risk, especially as global recession tail bets get unwound, and most of Asia’s exporters breathe a massive sigh of relief,” Innes said.

Following the hard-to-fathom rebound in U.S. markets Wednesday, world markets soared on Thursday, with Japan’s benchmark jumping more than 9%.

Chinese shares saw more moderate gains, given yet another jump in the tariffs each side is imposing on each others’ exports.

In Europe, Germany’s DAX initially gained more than 8%, but lost some of that momentum and were up 5.7% at midday. The CAC 40 in Paris gained 5.6% and Britain’s FTSE 100 surged 4.3%.

Analysts had expected the global comeback given that U.S. stocks had one of their best days in history on Wednesday as investors registered their relief over Trump’s decision.

“Everything is still very volatile, because with Donald Trump, you don’t know what to expect,” said Francis Lun, chief executive of Geo Securities. “This is really big uncertainty in the market. The threat of recession has not faded.”

Markets had been sinking earlier Wednesday on worries that Trump’s trade war could drag the global economy into a recession. But then came the posting on social media that investors worldwide had been waiting and wishing for.

“I have authorized a 90 day PAUSE,” Trump said, saying more than 75 countries are negotiating on trade and not retaliating against his latest increases in tariffs. China was a huge exception, with Trump saying tariffs are going up to 125% against its products.

The trade war is not over, and an escalating battle between the world’s two largest economies can create plenty of damage. U.S. stocks are also still below where they were just a week ago.

In Asia, Japan’s benchmark Nikkei 225 jumped 9.1% to finish at 34,609.00, zooming upward as soon as trading began.

Australia’s S&P/ASX 200 soared 4.5% to 7,709.60. South Korea’s Kospi gained 6.6% to 2,445.06. Hong Kong’s Hang Seng added 2.1% to 20,681.78. The Shanghai Composite rose 1.2% to 3,223.64.

In energy trading, benchmark U.S. crude fell $1.66 to $60.69 a barrel. Brent crude, the international standard, gained $1.01 to $63.83 a barrel.