The continuing trade war between China and the United States weighed heavily on investors' minds. The risk is that the tit-for-tat tariff battle between the world's two largest economies could turn the economic slowdown into a recession.
Money piles into gold and ultra-safe government bonds. The 10-year Treasury yield and 30-year Treasury yield starts to decline.
Tuesday, August 13
The Dow was close to 400 points higher, with the Nasdaq rising 2% and the S&P up 1.5%.
Wednesday, August 14
Yields on 10-year US Treasury bonds dip below the yield on the US 2-year bond, both hovering around 1.58% in the late afternoon. When shorter-term rates are higher than longer-term bond yields, that is known as an inverted yield curve. The 3-month US Treasury is already inverted against the 10-year in the spring.
Losses accelerate throughout the day with the Dow closing 800 points lower, or 3%. The S&P 500 and the Nasdaq close down by similar margins.
Despite all the bearish news, analysts still don't expect the US to enter a recession this year given the economy's continuing strength. Unemployment is at historic lows, consumer spending is booming and the financial system is healthy.
William Foster, Moody's lead US analyst, predicts the US economy will avoid a recession in 2019 and 2020, despite the yield curve inversion's warning sign. But it does expect growth to slow in the second half of this year into 2020.
Thursday, August 15
Friday, August 16
The Dow ends 307 points higher, or 1.2%. The S&P 500 rises 1.4% and the Nasdaq is up 1.7%. It was the third straight week of losses for the three major indexes, however.
US stocks rose after bond yields edged up in Europe and China signaled plans for additional stimulus to shore up their economies in the face of a global trade war. China's National Development and Reform Commission says it will boost stimulus to support the country's economy and stabilize employment.
–CNN Business' Victoria Cavaliere, Matt Egan, David Goldman and Paul R. La Monica contributed to this report.