WorldDesk

US stocks are experiencing choppy trading on Wednesday after major markets elsewhere sank, as President Donald Trump’s intensifying trade war continues to roil investors.

The S&P 500 edged up 0.3% during morning trading after a volatile start. The benchmark index, central to many 401(k) retirement plans, swung dramatically from a 0.5% decline to a 1.4% gain before easing again.

As of 10:15 a.m. Eastern time, the Dow Jones Industrial Average was down 34 points, or 0.1%, while the Nasdaq composite gained 1.1%.

Sharp fluctuations have become the norm for global markets lately—not just daily but even hourly—as investors try to anticipate the economic fallout from Trump’s escalating trade war. On Tuesday, the S&P 500 oscillated between a 4.1% rise and a 3% fall, marking a second consecutive day of drastic reversals.

Wall Street's latest movements follow the activation of Trump’s newest tariff measures, which took effect just after midnight, targeting goods from across the globe. This includes a 104% levy on Chinese imports. In response, China—the world’s second-largest economy—announced it would increase tariffs on U.S. products to 84% starting 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,” China’s Ministry of Commerce stated.

This hardline stance between the world’s two largest economies is fuelling fears that tariffs may become a long-term fixture—something many economists and investors believe could trigger a recession. On Wednesday, the European Union also authorised tariffs targeting $23 billion worth of U.S. goods in a retaliatory move of its own.

Despite this, some investors remain hopeful that Trump may eventually scale back tariffs following negotiations with other nations—an optimism that has occasionally driven stock prices higher.

“BE COOL!” Trump wrote on his Truth Social platform shortly after markets opened. “Everything is going to work out well. The USA will be bigger and better than ever before!”

One of the most notable market shifts on Wednesday was in the U.S. bond market, where Treasury yields surged once again. The yield on the 10-year Treasury rose to 4.37%, up from 4.26% on Tuesday and 4.01% last week. It briefly neared 4.50% earlier in the morning—an unusually large movement suggesting heightened stress.

Analysts point to various possible drivers, including hedge funds and other investors liquidating Treasury holdings to cover significant equity losses. International investors may also be offloading U.S. Treasurys due to trade tensions. Both scenarios would drive Treasury prices lower and their yields higher.

Regardless of the cause, rising Treasury yields exert pressure on the stock market and are likely to push up borrowing costs for mortgages and other consumer loans. Before markets opened, futures for the S&P 500 and other indexes trimmed earlier sharp losses as Treasury yields also moderated their gains.

The uncertainty surrounding tariffs is already complicating strategic planning for major U.S. corporations.

On Wednesday, Delta Air Lines withdrew its 2025 financial outlook, citing disrupted expectations for consumer and business spending and falling travel demand amid the trade conflict.

“With broad economic uncertainty around global trade, growth has largely stalled,” said CEO Ed Bastian in a statement. “In this slower-growth environment, we are protecting margins and cash flow by focusing on what we can control.”

Walmart, by contrast, affirmed its full-year projections for sales and operating income.

Overseas, stock markets saw widespread declines across Europe and much of Asia.

London’s FTSE 100 fell 2.2%, the Nikkei 225 in Tokyo dropped 3.9%, and Paris’ CAC 40 slid 2.6%.

Chinese markets, however, bucked the trend, with Hong Kong’s Hang Seng up 0.7% and Shanghai’s benchmark rising 1.3%.