Wall Street had another turbulent day Thursday that kept stock indexes flipping between gains and losses. The Standard & Poor’s 500 index and Dow Jones industrial average both ended in the black, while the Nasdaq lost a bit of ground.
Worries about a possible recession collided with hopes that the strongest part of the U.S. economy — shoppers spending at stores and online — can keep going.
The major U.S. stock indexes spent much of the day reacting to big moves in U.S. government bond yields, which fell sharply in the early going, fluctuated for much of the day and then recovered some of their decline.
U.S. government bonds have been among the loudest and earliest to cry out warnings about the economy. Stocks fell sharply Wednesday after a fairly reliable warning signal of recession emerged from the bond market. Even after the slide in yields eased Thursday, the U.S. bond market continued to show concern; yields ended broadly lower.
Stocks in Asia and Europe paved the way for the volatile day on Wall Street early Thursday after China said it would take “necessary countermeasures” if President Trump follows through on a threat to impose tariffs on more than $100 billion worth of Chinese goods on Sept. 1.
“What you’re seeing really is what’s been driving the market the last couple of weeks: trade tensions as well as yield curve stress,” said Lindsey Bell, investment strategist at CFRA.
The S&P 500 ended the day up 7 points, or 0.2%, at 2,847.60. The benchmark index swung between a 0.6% gain and 0.5% loss. The day before, it dived 2.9%.
The Dow, coming off its worst day of the year, rose 99.97 points, or 0.4%, to 25,579.39.
Other indexes didn’t catch the bounce. The Nasdaq composite ended down 7.32 points, or 0.1%, at 7,766.62, and the Russell 2000 index of smaller companies fell 5.87 points, or 0.4%, to 1,461.65.
Markets around the world have jerked up and down for weeks. Prices for stocks, gold, oil and other investments have been heaving as investors flail from one moment of uncertainty around Trump’s trade war to another around what central banks will do with interest rates.
Walmart shares climbed 6.1% on Thursday, helping to steady the U.S. stock market, after the retail giant said it made a bigger profit in the last three months than Wall Street expected, thanks in part to strong online sales of groceries. A separate government report also showed that retail sales across the country last month rose more than economists expected.
Consumer spending makes up the bulk of the U.S. economy, and shoppers have been carrying the economy recently amid worries that businesses will pull back on their spending because of the uncertainty created by the trade war. Other economies are slowing as the trade war does damage to manufacturers around the world.
Those concerns helped pull the yield on the 10-year Treasury down as low as 1.48% on Thursday from Wednesday’s 1.58%, another big move.
The yield rose as high as 1.54% by Thursday afternoon, though, which appeared to put some investors in a buying mood. That yield has been steadily falling since late last year, when it was above 3%. In late trading Thursday, the 10-year yield stood at 1.52%.
The 10-year yield has sunk so much that on Wednesday it dipped below the yield of the two-year Treasury, a rare occurrence and one that historically has suggested a recession may be a year or two away.
The 30-year Treasury yield fell to 1.93% from 2.02% and earlier touched a record low, a sign that investors are concerned about how the economy will do in the future. It also recovered some of its decline and stood at 1.96% Thursday afternoon. When investors worry about weaker economic growth and inflation, they tend to pile into Treasurys, which pushes up their prices and in turn pushes down yields.
“The countdown to a recession has just started,” said Hussein Sayed, chief market strategist at FXTM.
Trump again defended his trade war Thursday and said a resolution with China has “got to be a deal, frankly, on our terms.”
After being hopeful earlier this year that a U.S.-China trade agreement may be imminent, investors are increasingly digging in for the tensions to drag on for years. Britain’s pending exit from the European Union, political unrest in Hong Kong and a separate trade war between South Korea and Japan are all adding to the gloom.
The worries have pulled the S&P 500 down 4.5% so far this month, while other markets are down even more sharply. The S&P 500, though, remains within 6% of its record set late last month.
“No one actually knows what is next for the markets,” said Fiona Cincotta, senior market analyst at City Index. “However, the signs flashing from the markets are not great.”
Cisco Systems dropped 8.6% — one of the sharpest losses in the S&P 500 — after the technology giant gave a profit forecast that fell short of some analysts’ expectations.
Consumer products makers fared better. Besides Walmart’s surge, Procter & Gamble rose 1.4% and Coca-Cola gained 1.7%.
General Electric sank 11.3% on news that the industrial conglomerate is being accused of hiding its financial problems by Harry Markopolos, the whistleblower known for outing Bernie Madoff.
Commodity prices, which have been swinging sharply on worries that a weaker global economy will dent demand, lost ground. Benchmark U.S. crude fell 76 cents to $54.47 a barrel. Brent crude, the international standard, fell $1.25 to $58.23 a barrel.
Wholesale gasoline fell 4 cents to $1.64 a gallon. Heating oil fell 3 cents to $1.81 a gallon. Natural gas fell 9 cents to $2.23 per 1,000 cubic feet.
Gold, which has rallied when worries about the economy have grown, rose $3.70 to $1,519.60 an ounce. Silver fell 6 cents to $17.19 an ounce. Copper stayed at $2.59 a pound.