After trading began, the S&P 500 quickly sank 4.7% following even worse drops for financial markets worldwide amid worries that Trump’s tariffs could torpedo the global economy. But it suddenly erased all of it and surged to a gain of 3.4%, which would have counted as its best day in years. Almost as quickly, the index that sits at the heart of many investors’ 401(k) accounts gave that up and was roughly flat in midday trading.

Other U.S. stock indexes also careened through shocking trading. The Dow Jones Industrial Average went from a loss of 1,700 points to a leap of nearly 900 before settling at a loss of 272 points, or 0.7%, as of 11 a.m. Eastern time. The Nasdaq composite was 0.7% higher.

The swings shook the market as a White House account on X said a rumor circulating that Trump was considering a 90-day pause on his tariffs was “fake news.” The intense and sudden moves show how hard financial markets are straining to see hopes that Trump may let up on his stiff tariffs, which economists see raising the risks of a global recession.

Some investors are holding onto hope that Trump may still lower his tariffs after negotiating with other countries, and Trump said Sunday that he’s heard from leaders “dying to make a deal.”

On Sunday Trump told reporters aboard Air Force One that he does not want markets to fall. But he also said he wasn’t concerned about a sell-off, saying “sometimes you have to take medicine to fix something.”

Trump has given several reasons for his stiff tariffs, including to bring manufacturing jobs back to the United States, which is a process that could take years. Trump on Sunday said he wanted to bring down the numbers for how much more the United States imports from other countries versus how much it sends to them.

“The recent tariffs will likely increase inflation and are causing many to consider a greater probability of a recession,” JPMorgan CEO Jamie Dimon wrote in his annual letter to shareholders Monday. He’s one of the most influential executives on Wall Street. “Whether or not the menu of tariffs causes a recession remains in question, but it will slow down growth.”

The financial pain once again hammered investments around the world. Stocks in Hong Kong plunged 13.2% for their worst day since 1997. A barrel of benchmark U.S. crude oil briefly dropped below $60 for the first time since 2021, hurt by worries that a global economy weakened by trade barriers will burn less fuel. Bitcoin sank below $80,000, down from its record above $100,000 set in January, after holding steadier than other markets last week.

Trump’s tariffs are an attack on the globalization that’s remade the world’s economy, which helped bring down prices for products on the shelves of U.S. stores but also caused production jobs to leave for other countries.

It also adds pressure on the Federal Reserve. Investors have become nearly conditioned to expect the central bank to swoop in as a hero during downturns. By slashing interest rates to make borrowing easier for U.S. households and companies, along with other more untraditional moves to juice the economy, the Fed helped the U.S. economy recover from the 2008 financial crisis, the 2020 COVID crash and other bear markets.

But the Fed may have less freedom to act this time around because the conditions are so much different. For one, instead of a coronavirus or a system built up on too much belief that U.S. home prices would keep rising, this market downturn is mostly because of economic policy from the White House.

Perhaps more importantly, inflation is also higher at the moment than the Fed would like. And while lower interest rates can goose the economy, they can also put upward pressure on inflation. Expectations for inflation are already swinging higher because of Trump’s tariffs, which would likely raise prices for anything imported.

“The idea that there’s so much uncertainty going forward about how these tariffs are going to play out, that’s what’s really driving this plummet in the stock prices,” said Rintaro Nishimura, an associate at the Asia Group.

All the tumult has dragged the S&P 500 close to 20% below its record, which it set less than two months ago. If it finishes the day below that mark, i would be a big enough drop that Wall Street has a name for it. A “bear market” signifies a downturn that’s moved beyond a run-of-the-mill 10% drop, which happens every year or so, and has graduated into something more vicious.

The index is coming off its worst week since COVID began crashing the global economy in March 2020.

Nathan Thooft, chief investment officer and senior portfolio manager at Manulife Investment Management, said more countries are likely to respond to the U.S. with retaliatory tariffs. Given the large number of countries involved, “it will take a considerable amount of time in our view to work through the various negotiations that are likely to happen.”

“Ultimately, our take is market uncertainly and volatility are likely to persist for some time,” he said.