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Stocks Slammed After Yield Curve Flashes Recession Warning – Stocks plunged Wednesday after a key economic signal flashed a recession warning and both Germany and China showed more signs of slowing growth.

But by mid-afternoon, the major averages were off their lows. The Dow had fallen as many as 760 points.

At 2:10 PM ET (18:10 GMT), the S&P 500 was off 2.5%. The Dow Jones industrials were down 2.5%, and the Nasdaq Composite was off 2.7%.

The emotional catalyst came early in the day when the yield on the 10-Year Treasury note briefly fell below that of the 2-Year Treasury. That suggests investors were unwilling to commit money for longer-term investments.

The 10-year yield was at 1.591% at 1:30 p.m. ET while the 2-year yield was at 1.577%.

The market slump comes in the backdrop of the continuing trade fight between the United States and China, which has hit Chinese exports and exports of a number of U.S. products, especially soybeans.

Slumping exports sent Germany's economy into reverse in the second quarter, while Chinese industrial output growth cooled to a more-than-17-year low in July.

Interest rates globally have fallen as the scope of the slowdown has emerged. The Federal Reserve cut its key interest rate on July 31 in the face of bitter criticism from President Donald Trump. The Fed is expected to cut rates at its meeting in mid-September.

Only one of the Dow stocks was higher, Coca-Cola (NYSE:KO), a classic defensive stock. Boeing (NYSE:BA), Apple (NASDAQ:AAPL), Goldman Sachs (NYSE:GS), JPMorgan Chase (NYSE:JPM) and 3M (NYSE:MMM) were the biggest contributors to the Dow's decline.

In seven of 11 trading days so far in August, the Dow has risen or fallen more than 275 points during the day.

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