NEW YORK (AP) — The U.S. stock market is quivering but holding relatively steady in early Wednesday trading after other markets worldwide swung sharply as President Donald Trump’s trade war keeps escalating.
The S&P 500 was nearly unchanged after futures markets had earlier indicated it could be heading for a much steeper loss. It swung between gains and losses in the first five minutes of trading. The Dow Jones Industrial Average was down 170 points, or 0.5%, as of 9:35 a.m. Eastern time, and the Nasdaq composite was 0.5% higher.
Financial markets have been prone to huge swings recently, though, not just day to day but hour to hour. On Tuesday alone, the S&P 500 careened between a gain of 4.1% and a loss of 3% for its second day of stunning reversals.
Wall Street’s latest moves came after Trump’s latest round of tariffs kicked in after midnight for imports from around the world. That included a 104% tax on things coming from China, and the world’s second-largest economy quickly retaliated by saying it would raise tariffs on U.S. goods to 84% on Thursday.
“If the U.S. insists on further escalating its economic and trade restrictions, China has the firm will and abundant means to take necessary countermeasures and fight to the end” the Ministry of Commerce said.
Such aggressive brinkmanship by the world’s two largest economies is raising fears that tariffs will stick around for a while, which economists and investors expect would create a recession. Some hope still does remain on Wall Street that Trump could lower his tariffs following negotiations with other countries, which is what’s helping to send stock prices upward at times.
Some of Wednesday’s strongest action was in the U.S. bond market where Treasury yields rose sharply again. The yield on the 10-year Treasury rose to 4.36% from 4.26% late Tuesday and from just 4.01% at the end of last week. It got as high as 4.50% earlier in the morning. That’s a huge move for the bond market and could be an indication of stress.
Analysts say several reasons could be behind the move, including hedge funds and other investors having to sell their Treasury bonds to raise cash in order to make up for their sharp losses in the stock market. Investors outside the United States may also be selling their U.S. Treasurys because of the trade war. Both actions would push down prices for Treasurys, which in turn would push up their yields.
Regardless of the reasons behind it, the higher yields on Treasurys add pressure on the stock market and will likely push up rates for mortgages and other loans for U.S. households. Futures for the S&P 500 and other U.S. stock indexes pared their losses Wednesday morning as Treasury yields pared their big gains.
All the uncertainty about tariffs is making planning more difficult for big U.S. companies.
Delta Air Lines pulled financial forecasts for 2025 Wednesday as the trade war scrambles expectations for business and household spending and depresses bookings across the travel sector. Its stock rose 7.1%.
“With broad economic uncertainty around global trade, growth has largely stalled,” CEO Ed Bastian said in a statement on Wednesday. “In this slower-growth environment, we are protecting margins and cash flow by focusing on what we can control.”
In stock markets abroad, indexes tumbled across most of Europe and much of Asia.
London’s FTSE 100 dropped 2.7%, Tokyo’s Nikkei 225 sank 3.9% and the CAC 40 fell 3.3% in Paris.
Chinese stocks were an outlier, and indexes rose 0.7% in Hong Kong and 1.3% in Shanghai.
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AP Business Writers Matt Ott and Elaine Kurtenbach contributed.