A volatile day for stocks Wednesday as the Dow, S&P and Nasdaq plummeted early - the Dow almost 600 points – but clawed back by day’s end.
Sparking the commotion: Fears the U.S.-China trade war would drag down an already slowing global economy.
As a result, investors flocked to the safe haven of the bond market, sending U.S. Treasury yields tumbling – with 30-year yields approaching record lows.
Bond yields also rebounded by day’s end, but a closely watched recession indicator within the bond market was at its most elevated levels since March 2007.
Many investors betting the Federal Reserve will have to pick up its pace of interest rate cuts to counter recession risks.
Central banks in New Zealand, India and Thailand on Wednesday all cut their lending rates, fearing the global ripple effect of the U.S.-China trade war.
But President Trump on Wednesday tried to play down trade tensions.
(SOUNDBITE)(ENGLISH) U.S. PRESIDENT DONALD TRUMP SAYING: “I think the market reaction is anticipated.
I would have maybe anticipated even more but ultimately it’s going to go much higher than it ever would have gone because China was like an anchor on us.
China was killing us with unfair trade deals.” Trump announced last week he would slap a 10% tariff on an additional $300 billion in Chinese imports beginning September 1st.
China responded by letting its currency’s value slide... a move condemned by Washington.