Wall Street’s gyrations shook markets anew on Friday, with stocks wiping out losses to extend their biggest rally since 2023 as a selloff in bonds waned.

Volatility shows little signs of easing as concerns that President Donald Trump’s fast-evolving trade policy is not only shaking the globe but threatening the U.S. status as the world’s safe haven. Equity convulsions have unsettled traders, with the S&P 500 up 1% after earlier falling about as much. Treasury 30-year yields dropped, while still remaining higher by 45 basis points since last Friday. The greenback hit a fresh six-month low.

Not since the COVID-19 pandemic has there been this little clarity on what the outlook for economies and earnings will look like, with financial markets descending into chaos, China unleashing retaliatory measures and the U.S. president pausing some levies only hours after they took effect.

Investors should sell any rallies in the S&P 500 until the U.S. and China de-escalate the global trade war and the Federal Reserve steps in, according to Bank of America’s Michael Hartnett.

The strategist said tariffs and the resulting market turmoil were turning U.S. exceptionalism into “U.S. repudiation.” He recommends a short position on stocks — until the S&P 500 hits 4,800 points — and a long bet on two-year Treasuries. The gauge traded around 5,340 Friday.

Higher bond yields, lower stocks and a weaker dollar are “driving global asset liquidation, will likely force policymakers to act,” Hartnett wrote in a note. But investors should “sell the rips in risk assets.”

“The U.S. markets are not trading in the last couple weeks, like their traditional developed safe-haven status,” said Phillip Colmar at MRB Partners. “They’re trading more like a weak emerging-market country. We’re seeing the dollar really slide, and we’re seeing the bond market get threatened here.”

Friday brought a fresh signal that consumers were queasy even before Wednesday’s policy shift, with a plunge in sentiment as inflation expectations soared to multi-decades highs.

With tariffs at levels now set to halt most trade between the world’s biggest economies, the concern now is that the economic fight could spill into other areas. China retaliated against Trump’s latest tariffs by hiking duties on all U.S. goods, while calling the administration’s actions a “joke” and saying it no longer considers them worth matching.

As China hiked duties on all American goods, shares of chipmakers with U.S. manufacturing plummeted. Tesla Inc. stopped taking orders in China for Model S sedans and Model X sport utility vehicles — both of which are imported from the U.S. Meantime, JPMorgan Chase & Co.’s stock traders took in a record haul, boosted by chaotic market moves set off by policy announcements.

JPMorgan Chief Executive Officer Jamie Dimon said he expects “a kerfuffle” in the Treasury market that prompts a Federal Reserve intervention.

“There will be a kerfuffle in the Treasury markets because of all the rules and regulations,” Dimon said Friday on an earnings call. When that happens, the Fed will step in — but not until “they start to panic a little bit,” he added.

“U.S. bond market behavior has been the most worrisome part of price action this week,” said Ajay Rajadhyaksha of Barclays Plc. “Until Treasuries stabilize and start to behave normally, risk assets will struggle, in our view.”

After a week of wild swings in the bond market, China’s holdings of Treasuries are increasingly under scrutiny from analysts around the world.

Some have gone as far as suggesting — without hard evidence — that sales by Beijing may have helped fuel the biggest surge in 30-year yields since the pandemic and subsequent volatility. Others debate whether China might turn to dumping U.S. debt in the future as a response to the steepest American tariffs in a century

Some of the main moves in markets:

Stocks

—The S&P 500 rose 1.2% as of 12:37 p.m. New York time

—The Nasdaq 100 rose 1.3%

—The Dow Jones Industrial Average rose 1%

—The MSCI World Index rose 0.9%

Currencies

—The Bloomberg Dollar Spot Index fell 0.7%

—The euro rose 0.7% to $1.1284

—The British pound rose 0.6% to $1.3044

—The Japanese yen rose 0.4% to 143.93 per dollar

Cryptocurrencies

—Bitcoin rose 3.6% to $82,726.1

—Ether rose 2.6% to $1,569.67

Bonds

—The yield on 10-year Treasuries advanced seven basis points to 4.50%

—Germany’s 10-year yield declined one basis point to 2.57%

—Britain’s 10-year yield advanced 11 basis points to 4.75%

Commodities

—West Texas Intermediate crude rose 1.3% to $60.88 a barrel

—Spot gold rose 1.8% to $3,233.15 an ounce

(With assistance from Robert Brand, Julien Ponthus and Anand Krishnamoorthy.)

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