Wall Street suffered a stomach-churning session Wednesday as traders sent the Dow down more than 550 points at the open — only to walk the losses back later in the day on hopes that the market finally found its bottom.
The Dow Jones industrial average plunged 589.13 soon after Wednesday’s open on as investors continued to fret over slowing global growth and ongoing tensions between the US and China.
But the blue-chip index recouped most of its losses to end down a more modest 22.45 points, or 0.1 percent, at 26,007.07. Both the S&P 500 and Nasdaq were able to notch gains, closing up 0.1 percent and 0.4 percent, respectively.
The early carnage began as traders fled stocks in favor of so-called safe-haven assets such as gold and government bonds. The flight to safety propelled gold prices to above $1,500 an ounce, representing a six-year high. Meanwhile, the yield on the 10-year note briefly went below 1.6 percent before recovering. Yields move in the opposite direction to price.
The stabilization in bond yields in Wednesday’s session was enough for traders to regain some confidence in stocks, analysts say.
“The unrelenting pressure on the 10 year eased, and the equity market slowly began to pare losses,” Quincy Krosby, chief market strategist at Prudential Financial, told The Post.
Traders have been in a panic over the last week as hopes of the US and China coming to an agreement on trade dimmed.
China allowed its currency, the yuan, to fall below the 7-per-dollar rate earlier this week — a move that led President Trump and the Treasury Department to accuse the country of currency manipulation. And although China indicated that it would not allow the yuan to fall much further, it was priced weaker-than-expected Tuesday evening, setting the stage for Wednesday’s sell-off.