NEW YORK — Wall Street is careening through a shocking day of trading Monday, catapulting from an early drop that had dragged it 20% below its record to a sudden rise, only to revert to losses as worries remain about whether President Donald Trump’s trade war will torpedo the global economy.

The S&P 500 went from a 4.7% drop shortly after the start of trading all the way to a surge of 3.4%, a gain that would have counted as its best day in years. It then quickly gave up all of it to revert to a drop of 1.3%, as of 10:30 a.m. Eastern time.

Intense Volatility Grips Markets

The Dow Jones Industrial Average was down 736 points, or 1.9%, and the Nasdaq composite was 1.3% lower. Both also whipped through intense reversals, with the Dow going from a loss of 1,700 points to a gain of nearly 900 points.

The intense swings come as financial markets strain 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 lower his tariffs after negotiating with other countries, and Trump said Sunday that he’s heard from leaders “dying to make a deal.” A drop in tariffs relatively soon could help avoid a recession, but whether that can happen is still uncertain.

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.

Global Economic Concerns Mount

“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 $78,000, 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.

Fed Faces Limited Options Amid Inflation Fears

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.

If the S&P 500 finishes the day more than 20% below its record, it’s 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, which sits at the heart of many investors’ 401(k) accounts, has lost nearly 20% since setting a record less than two months ago. It’s 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.

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Kurtenbach reported from Bangkok. McHugh reported from Frankfurt, Germany. Associated Press writers Ayaka McGill, Paul Harloff, Matt Ott and Jiang Junzhe contributed.