U.S. stocks clawed most of their way back from a deep slide Thursday that at one point had wiped out the market’s gains for the year.

An early plunge briefly knocked more than 700 points off the Dow Jones Industrial Average as the arrest of a senior Chinese technology executive threatened to cause another flare-up in tensions between Washington and Beijing.

The sell-off eased by late afternoon, however, after The Wall Street Journal reported that the Federal Reserve is considering breaking with its current approach of steady interest rate hikes, favoring a wait-and-see approach. That was relief to investors worried that the Fed might raise interest rates too fast, which could choke off economic growth.

“The Fed is trying to, in essence, come out and make it clear they are not on a rigid schedule of rate hikes next year,” said Quincy Krosby, chief market strategist at Prudential Financial.

The S&P 500 index fell 4.11 points, or 0.2 percent, to 2,695.95. The benchmark index had been down as much as 2.9 percent.

The Dow dropped 79.40 points, or 0.3 percent, to 24,947.67. The average briefly slumped as much as 784 points.

The technology-heavy Nasdaq composite reversed an early loss to finish with a gain, adding 29.83 points, or 0.4 percent, to 7,188.26.

The Russell 2000 index of small-company stocks gave up 3.34 points, or 0.2 percent, to 1,477.41.

Traders continued to shovel money into bonds, a signal that they see weakness in the economy ahead. The yield on the 10-year Treasury note fell to 2.89 percent from 2.92 percent on Tuesday, a large move.

U.S. stock and bond trading were closed Wednesday because of a national day of mourning for President George H.W. Bush.

Losses in banks and energy and industrial stocks outweighed gains in internet and real estate companies.

Citigroup fell 3.5 percent to $60.06. Halliburton slid 4.7 percent to $29.79. Discovery climbed 4.7 percent to $26.99.

Last week, stocks jumped after Fed Chairman Jerome Powell indicated the central bank might consider a pause in rate hikes next year while it gauges the impact of its credit tightening program.

The Fed has raised rates three times this year and is expected to boost rates for a fourth time at its Dec. 18-19 meeting of policymakers. That steady pace of rate hikes has begun to worry some investors amid growing signs that some sectors of the economy are hurting, including the U.S. housing market. At the same time, there has been growing evidence that global economic growth is slowing.

“The market seems right now to be focused on increased risks for a 2020 recession,” said Patrick Schaffer, Global Investment Specialist, J.P. Morgan Private Bank. “It’s a very hard market to buy when you see really strong signals that we are indeed late (in the economic) cycle.”

Thursday’s initial wave of selling in the market came about as traders reacted to the news that Canadian authorities arrested the chief financial officer of China’s Huawei Technologies on Wednesday for possible extradition to the U.S. The Globe and Mail newspaper, citing law enforcement sources, said Meng is suspected of trying to evade U.S. trade curbs on Iran.

Meng is a prominent member of Chinese society as deputy chairman of the board and the daughter of company founder Ren Zhengfei. China demanded Meng’s immediate release.

The arrest came less than a week after President Donald Trump met with Chinese President Xi Jinping at the G-20 summit in Argentina.

Markets rallied on Monday on news that Trump and Xi agreed to a temporary, 90-day stand-down in their trade dispute. That optimism quickly faded as skepticism grew that Beijing will yield to U.S. demands anytime soon, leading to a steep sell-off in global markets on Tuesday.

On Thursday, China’s government said it would promptly carry out the tariff cease-fire with Washington. It also expressed confidence that the two nations can reach a trade agreement. The remarks suggest Beijing wants to avoid disruptions from Meng’s arrest.

Even so, investors remained skeptical.

“Trade tensions aren’t going away,” Schaffer said. “Contradictory statements from the administration have given some people a little bit of pause with respect to the optimism that people felt following the Argentina G-20 conference.”

The renewed jitters over the implications that Meng’s arrest could have on U.S.-China trade negotiations weighed on overseas markets.

In Europe, the DAX in Germany dropped 3.5 percent, while France’s CAC 40 lost 3.3 percent. The FTSE 100 in Britain declined 3.1 percent, its biggest drop since the country held a vote to leave the European Union in June 2016.

The news also resulted in another down day for markets in Asia.

Hong Kong’s Hang Seng index tumbled 2.5 percent and Japan’s benchmark Nikkei 225 fell 1.9 percent. Australia’s S&P/ASX 200 lost 0.2 percent, while South Korea’s Kospi sank 1.6 percent. Shares also fell in Taiwan and all other regional markets.

Oil prices fell sharply as traders appeared to doubt that an expected production cut by OPEC will be enough to boost the price of crude.

OPEC countries gathered in Vienna Thursday to find a way to support the falling price of oil. Analysts predicted the cartel and some key allies, like Russia, would agree to cut production by at least 1 million barrels per day. OPEC heavyweight Saudi Arabia indicated it was in favor of such a cut.

The expectation did not keep the price of oil from falling, however, as investors focused on the potential economic disruption from any escalation in the U.S.-China trade dispute.

Benchmark U.S. crude dropped 2.6 percent to settle at $51.49 a barrel in New York. Brent crude, used to price international oils, slid 2.4 percent to close at $60.06 per barrel.

The dollar weakened to 112.65 yen from 113.19 yen late Wednesday. The euro rose to $1.1373 from $1.1342.

Gold gained 0.1 percent to $1,243.60 an ounce. Silver fell 0.5 percent to $14.51 an ounce. Copper dropped 1.1 percent to $2.74 a pound.

In other commodities trading, wholesale gasoline lost 0.8 percent to $1.43 a gallon. Heating oil gave up 1.6 percent to $1.86 a gallon. Natural gas slid 3.2 percent to $4.33 per 1,000 cubic feet.

(AP)