Wall Street closed lower on Thursday, with the Dow Jones plunging more than 700 points at one point, as the arrest of a Chinese technology executive fanned fears of US-China tensions over trade.
The Dow Jones Industrial Average declined 79 points, or 0.3%, to 24,948, though the index was down by as much as 785 points at the lowest point. The S&P 500 index fell four points, 0.2%, to 2,697 and the Nasdaq Composite Index fell 30 points, or 0.4%, to 7,188.
The initial selling followed news that the chief financial officer of telecom equipment maker Huawei Technologies had been arrested in Canada and faced extradition to the US.
The arrest came as investor enthusiasm had already faded following a truce reached over the weekend in talks between the US and China.
However, a Wall Street Journal report that the Fed may consider a pause after raising interest rates later this month helped the market bounce back in the afternoon. US Treasury yields fell, with 10-year yields hitting three-month lows. Financial shares, which are sensitive to bond yield swings, fell 1.4%.
The energy sector slumped 1.8% and was the worst performing group, as oil fell after Opec and allied exporting countries ended a meeting without announcing a decision to cut crude output.
Stocks perceived to be vulnerable to the US-China trade war were among notable losers. Apple Inc. fell 1.1%, while Chinese internet firm JD.com Inc. was down 1% and Baidu Inc. fell 1.1%.
Semiconductor firms were also hurt, with Xilnix Inc. down 2.5% and Broadcom Inc. off 2.1%.
Shares of Children’s Place Inc. plunged 13%, hitting 13-month lows earlier, after the retailer cut its earnings and margin outlook for the full year.
Shares of Sears Holdings Corp. rose 3.9% after Eddie Lampter's ESL Investments Inc. placed a bid of $4.6 billion to purchase what remains of the retailer.
In Asia, shares traded cautiously on Friday in morning session on the back of a report suggesting the US Fed could consider a slower tempo of increasing interest rates than had been previously expected.
In the mainland China, both the Shanghai composite and the Shenzhen composite were largely flat. Meanwhile, the Hang Seng index in Hong Kong saw fractional losses. Japan's Nikkei 225 rose 0.13% in morning trade while the Topix index slipped 0.14%.
Over in South Korea, the Kospi gained 0.41%. The ASX 200 in Australia rose 0.51% in afternoon trade.