Stocks fell sharply on Thursday as continuing fears over U.S.-China trade relations and concern over a possible global economic slowdown kept investors on edge.
At its low of the day, the Dow Jones Industrial Average dropped nearly 800 points, bringing its two-day losses to more than 1,500 points. But the market bounced midway through the trading day as shares of Amazon and Alphabet fought back into the green. The Dow was last down about 400 points.
The S&P 500 fell 1.4 percent, led by a decline in bank shares like J.P. Morgan Chase, while the Nasdaq Composite also dropped 0.6 percent. The S&P 500 fell back into correction territory at one point, down 10 percent from its 52-week high.
“There’s concern that the trade deal is not as good as [President Donald] Trump said it was,” said Mark Esposito, CEO of Esposito Securities. “Recession fears are also settling into the market.”
“It’s definitely safer to be in cash right now,” Esposito said. “I don’t think the fall is over.”
Trade fears ratcheted up after news broke Wednesday that Huawei CFO Meng Wanzhou was arrested by Canadian authorities in Vancouver, where she faces extradition to the U.S. The arrest — which took place Dec. 1 — decreases the likelihood that a permanent U.S.-China trade deal will be reached. Huawei is one of the largest mobile phone makers in the world.
News of Wanzhou’s arrest comes after President Donald Trump and Chinese President Xi Jinping agreed to hold off on implementing additional tariffs on each other’s goods. After an initial rally on Monday, stocks have suffered as the Trump administration’s comments on details of the deal have been inconsistent.