(CNN) - Wall Street's headaches are growing. The US-China trade war is getting scary. A recession indicator is flashing red. And oil prices are swinging wildly.
The Dow declined 221 points, or 0.9%, on Wednesday, rebounding a bit from steep losses earlier in the session. The index had been down by as much as 410 points and even briefly dropped below the 25,000 level.
The renewed market turbulence reflects deepening concerns about the fallout from the collapse in trade talks between the Trump administration and China. Investors fear that tariffs — and China's retaliation — will slow the global economy and ding corporate profits.
"There's a growing realization that the US-China trade relationship has been badly damaged and is deteriorating," said Kristina Hooper, chief global market strategist at Invesco. "Finally, stocks are pricing that in."
There's been rising concern in recent days about how China will retaliate against US tariffs.
One worry is that Beijing will place restrictions on rare-earth exports, elements crucial to the production of smartphones, missile systems and other high-tech devices. About 80% of all rare earth minerals imported into the United States are from China.
"Trade talks have stalled. That's putting fear into people and getting them to move out of stocks," said Ryan Nauman, market strategist at Informa Financial Intelligence's Zephyr.
Yield curve freaks investors out
Cash has rushed to the safety of government bond yields, sending 10-year Treasury bond yields plunging to the lowest levels since late 2017.
Crucially, the yield curve — the gap between short-term and long-term bond yields — has once again inverted. In the past, that has been a reliable predictor of eventual recessions.
"The curve getting inverted could become a self-fulfilling prophesy," said Michael Block, market strategist at Third Seven Advisors. "It's freaking the hell out of everyone."
The recent market slide has wiped about 6% off the S&P 500 since it closed at record highs in late April. The Dow has declined five weeks in a row, its longest weekly slump since 2011.
Oil, copper tumble
Energy stocks were also pressured by massive swings in the oil market. US oil plunged nearly 4% to as low as $56.88 a barrel on Wednesday before staging a sharp rebound. Crude ended the day down just 0.6%.
Baker Hughes and Marathon Oil declined about 2% apiece.
Copper, another economically-sensitive commodity, fell 1.2% to four-month lows.
Recession fears overdone?
The Dow has lost almost 6% in May, leaving it on track for its first losing month of 2019. The Dow hasn't had a losing May since 2012. The CNN Business Fear & Greed Index is flashing "fear," compared with "greed" a month ago.
The wave of selling brought back memories of December, when economic and trade fears delivered the worst month on Wall Street since the Great Depression. The extreme turbulence nearly ended the decade-long bull market in US stocks.
"I don't think this is the start of a bear market," said Block.
Even though the yield curve has inverted and manufacturing is struggling, other economic indicators look relatively healthy. Most notably, the United States added 263,000 jobs in April, lowering the unemployment rate to a 49-year low of 3.6%.
"While fears are definitely justified regarding tariffs and weakness abroad, the US economy is still on very solid footing," said Mike Loewengart, vice president of investment strategy at E*Trade.
Investor moves into safe havens like utilities and bonds, Loewengart said, "doesn't mean we're anywhere near a recession."
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