USA stocks steadied themselves Thursday amid hopes that the heart of the economy - shoppers spending at stores and online - can stay strong and help avert a recession.
Asian shares were mixed Friday as turbulence continued on global markets amid ongoing worries about U.S.
The S&P 500 moved between modest gains and losses in morning trading after suffering a steep decline a day earlier, when stocks tumbled after a fairly reliable warning signal of recession emerged from the bond market. Stocks from Tokyo to London, meanwhile, sank after China said it would take "necessary countermeasures" if President Donald Trump follows through on a threat to impose tariffs on more than $100 billion of Chinese goods on September 1.
Investors in stocks were spooked earlier this week by developments in the USA bond market, which was pricing in a likely recession next year. A separate government report also showed that retail sales across the country last month rose more than economists expected.
The S&P 500 was down 1 point as of 11:13 a.m. A day earlier, it plunged 2.9%.
USA stocks were poised for solid gains at the open too with Dow futures and the broader S&P 500 futures up 0.9%.
Consumer spending makes up the bulk of the US economy, and shoppers have been carrying the economy recently amid worries that businesses will pull back on their spending due to all the uncertainty created by the trade war.
Yet so far, the biggest headwind to European trade - and that's key to its economy because exports make up some 46% of the bloc's total output - has come from a conflict on the other side of the world.
German stimulus hopes helped the benchmark 10-year US Treasury yield rise from three-year lows, closing the book on a fraught week which saw 10-year yields dip below those of two-year notes, a classic recessionary red flag.
The inversion of that part of the yield curve US2US10=TWEB has historically been a reliable indicator that a usa recession is coming in one to wo years.
The 30-year Treasury yield fell to 2.01 percent from 2.02 percent and earlier dropped below 2% to a record low, a sign of concern among investors. 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. -China trade war. Still, the farm equipment maker's decision to cut costs sent the stock up 3.5%.
"China is prepared to escalate this one as much as the US", said Chris Beauchamp, chief market analyst at investment firm IG Group.
The S&P 500 index has now sunk 4.5% since President Donald Trump announced a fresh round of tariffs on Chinese imports at the start of August and is on course for its worst three-week percentage slide this year.
The S&P 500 posted 32 new 52-week highs and 7 new lows; the Nasdaq Composite recorded 33 new highs and 87 new lows.
He said: "No one knows when a bear market begins, but if the United States and China don't reach a trade agreement soon, the chance of one is highly likely".
"(It was a) great headline but further analysis may eventually create uncertainty and weaken markets", Carter said.
In Europe, Germany's DAX sank 0.7 percent, while France's CAC 40 lost 0.3 percent. The FTSE 100 index of leading British shares was 0.7% higher at 7,115. In Tokyo, the Nikkei 225 ended flat at 20,418.81 points; Hong Kong - Hang Seng closed up 0.9% to 25,734.22 points and Shanghai - Composite ended up 0.3% to 2,823.82 points yesterday.
Commodity prices, which have been swinging sharply on worries that a weaker global economy will dent demand, were lower.
Benchmark U.S. crude added 62 cents to $55.09. Brent crude, the worldwide standard, lost $1.20, or 2%, to $58.28. It fell 76 cents to $54.47 per barrel Thursday. The dollar-yen pair was unchanged, trading at 105.90. The euro strengthened to $1.1107 from $1.1137.