NEW YORK — U.S. stocks on Thursday are giving back some of their historic gains from the day before as Wall Street weighs a global trade war that has cooled in temperature but is still threatening the economy.

The S&P 500 was down 2.3%, a day after surging 9.5% following President Donald Trump’s decision to pause many of his tariffs worldwide. The Dow Jones Industrial Average was down 700 points, or 1.7%, as of 9:35 a.m. Eastern time, and the Nasdaq composite was 2.7% lower.

Even a better-than-expected report on inflation Thursday morning wasn’t enough to get U.S. stocks to add to their surges from the day before, including the S&P 500’s third-best since 1940. Economists said the data wasn’t useful because it offered a view only of the past, when inflation may rise in coming months because of tariffs. A better-than-expected report on joblessness didn’t help much either, with Wall Street’s focus entirely on what’s to come.

“Trump blinks,” UBS strategist Bhanu Baweja said about the president’s decision on tariffs, “but the damage isn’t all undone.”

Trump Focused on China

Trump has focused more on China, raising his tariffs on products coming from the world’s second-largest economy to 125%. Even if that were to get negotiated down to something like 50%, and even if only 10% tariffs remained on other countries, Baweja said the hit to the U.S. economy could still be large enough to hurt expected growth for upcoming U.S. corporate profits.

China, meanwhile, has been reaching out to other countries around the world in hopes of forming a united front against Trump. The European Union, though, on Thursday said it will put its trade retaliation measures on hold for 90 days and leave room for a negotiated solution.

Trump and his Treasury secretary, Scott Bessent, sent a clear message to other countries Wednesday after announcing their tariff pause: “Do not retaliate, and you will be rewarded.”

That has many on Wall Street prepared for still more wild swings to come in the market, after the S&P 500 at one point nearly dropped into a “bear market” by almost closing 20% below its record. Often, the whipsaw moves had come not just day to day but also hour to hour. The S&P 500 still remains below where it was when Trump announced his sweeping set of tariffs last week on “Liberation Day.”

“Everything is still very volatile, because with Donald Trump, you don’t know what to expect,” said Francis Lun, chief executive of Geo Securities. “This is really big uncertainty in the market. The threat of recession has not faded.”

Bond Market Seems to Be Easing

One encouraging signal, though, is coming from the bond market where stress seems to be easing a bit.

Big jumps for Treasury yields earlier this week had rattled the market, so much that Trump said Wednesday he had been watching how investors were “getting a little queasy.”

Several reasons could have been behind the sharp, sudden rise, including hedge funds having to sell their Treasurys in order to raise cash or investors outside the United States dumping their U.S. investments because of the trade war. Regardless of the reasons behind it, higher yields on Treasurys crank up pressure on the stock market and push rates higher for mortgages and other loans for U.S. households and businesses.

But the 10-year Treasury yield has calmed over the last day and was sitting at 4.31%. That’s after it had shot up to nearly 4.50% Wednesday morning from just 4.01% at the end of last week.

In stock markets abroad, indexes rallied across Europe and Asia in their first chances to trade following Trump’s pause. Japan’s Nikkei 225 surged 9.1%, South Korea’s Kospi leaped 6.6% and Germany’s DAX returned 5.6%.