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U.S. stocks slumped and Treasuries rallied after President Donald Trump said he’ll respond to new Chinese tariffs and blasted Federal Reserve Chairman Jerome Powell. The dollar fell.

Equities started the day lower after China threatened to impose additional tariffs on $75 billion of American goods. The S&P 500 Index briefly rose as Powell’s remarks bolstered bets the central bank will cut rates next month. Gains fizzled out quickly after Trump’s tweet, with tech companies leading the stock rout. The Dow Jones Industrial Average tumbled 500 points.

The bond market’s U.S. recession indicator – the spread between 2- and 10-year rates – flirted with inversion again. Elsewhere in the yield curve, three-month and 10-year Treasuries got to the most-inverted level since March 2007. The greenback dropped as Trump said that “we have a very strong dollar and a very weak Fed,” fueling chatter about a possible move to weaken the currency. Oil sank and gold surged.

The escalation in the trade feud rekindled concerns about the outlook for global growth that’s already looking shaky. The announcement comes as leaders from the Group of Seven nations prepare to meet in France and central bankers gather in Jackson Hole. Trump tweeted that the Fed chairman could be a greater “enemy” of the U.S. than Chinese President Xi Jinping. “As usual, the Fed did NOTHING!,” he wrote.

“Trade trumps Jackson Hole,” said John Augustine, chief investment officer at Huntington Private Bank. “Fed Chair Powell was fairly dovish today and markets were reacting to that positively, but when the trade tweet came out, that obviously changed market dynamics.”

The plunge in the S&P 500 Friday destroyed what was shaping up to be a rally for the week. There have been just four other weeks during this bull market when a Friday rout erased a gain of more than 1% through Thursday, data compiled by SentimenTrader show. This had never occurred from 1950 to mid-1980s, and since then, it’s happened just 15 other times before this week.

Here are the main moves in markets:

Stocks

  • The S&P 500 lost 2.1% to 2,861.22 at 1:33 p.m. New York time.
  • The CBOE Volatility Index surged 25%.
  • The Stoxx Europe 600 Index declined 0.8%.
  • The MSCI Asia Pacific Index climbed 0.5%.

Currencies

  • The Bloomberg Dollar Spot Index sank 0.3%.
  • The euro added 0.6% to $1.1142.
  • The Japanese yen jumped 1% to 105.34 per dollar.

Bonds

  • The yield on 10-yearTreasuries slid 10 basis points to 1.51%.
  • Germany’s 10-year yield fell three basis points to -0.68%.
  • Britain’s 10-year yield dropped four basis points to 0.481%.

Commodities

  • The Bloomberg Commodity Index declined 0.7%.
  • West Texas Intermediatecrude sank 3.1% to $53.61 a barrel.
  • Gold surged 1.9% to $1,537.70 an ounce.

With assistance from Caroline Hyde, Joanna Ossinger, Adam Haigh, Todd White, Yakob Peterseil, Namitha Jagadeesh, Susanne Barton, Sarah Ponczek, Dave Liedtka, Elena Popina, Alexandra Harris and Liz Capo McCormick.

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