China announced Thursday that it would be forced to take “necessary countermeasures” if President Trump moves forward with tariffs set to take effect Sept. 1, continuing the back-and-forth escalation of the trade war even as the conflict elevates fears of a global economic slowdown.

Earlier this week, in a rare moment of easing, Trump announced that tariffs on certain consumer goods would be postponed until mid-December to spare consumers and companies some of the added costs during the holiday shopping season. It marked Trump’s first public acknowledgment that Americans shoulder the burden from his tariffs, although in tweets Trump also said the move “actually helps China more than us” and claimed China would reciprocate.

But the Chinese response Thursday showed that Beijing was not appeased by the delay.

“The move by the U.S. seriously violated the consensus reached between the two heads of state in Argentina and Osaka, and deviates from the right track of resolving differences through consultation,” the Customs Tariff Commission of the State Council said in a statement. “China will have to take necessary countermeasures.”

Markets around the world slumped after China’s announcement. In the United States, stocks vacillated between gains and losses, with the Dow Jones industrial average rising about 100 points, or .4 percent, by the closing bell.

“Every time investors find the strength to pick themselves up off the floor, the trade war delivers another blow and knocks them down again,” Craig Erlam, an analyst with OANDA, wrote in a note to investors Thursday. “This report also answers the question of whether China viewed the decision to delay half of the tariff hikes until mid-December as being conciliatory in any way or just an act of self-preservation, given the importance of the holiday season in the U.S.”

Chinese officials offered no further details as to what form countermeasures might take, or whether their trade negotiators would still be coming to the U.S. to continue talks in September. But the message shows China is prepared to dig its heels in, even as it grapples with political protests in Hong Kong and a raft of disappointing economic data. Earlier this week, China reported levels of high unemployment, as factory output fell to a 17-year low, showing the breadth of the nation’s economic slowdown.

In the United States, similar omens are looming. For the first time since the run-up to the Great Recession, the yields — or returns — on short-term U.S. bonds eclipsed those of long-term bonds. This phenomenon, which suggests investor faith in the economy is faltering, has preceded every recession in the past 50 years.

“The stars are aligned across the curve that the economy is headed for a big fall,” said Chris Rupkey, chief financial economist at MUFG Union Bank. “The yield curves are all crying timber that a recession is almost a reality, and investors are tripping over themselves to get out of the way.”

The panic caused the Dow Jones industrial average to shed about 800 points Wednesday, in its biggest single-day drop of 2019. Stocks bounced around most of Thursday, a reflection of investor uncertainty over the competing issues of China trade, the global bond market and an expanding U.S. economy.

By the end of the day, there was not that much change from when the session started. There was some help from a robust report on July retail sales from the Commerce Department. The Labor Department also reported that U.S. productivity rose 2.3 percent in the second quarter.

The Dow and Standard & Poor’s 500 index both settled slightly to the upside but far from clawing back Wednesday’s losses. Shares of retail giant Walmart spearheaded the blue chips, rising 6.11 percent on a better-than-expected earnings report. The S&P finished up the day at 2,847, a gain of 7 points or 0.25 percent. The Nasdaq composite was the only down-note, but it was still close to break-even at 7,766, a 7-point loss.

The president took to Twitter once again to blame the media for its reporting on the worsening world economy.

Simeon Hyman, global investment strategist at ProShares, said the stock market’s middling mood on Thursday reflected of the “tug of war” between a strong American economy and “the rest of the world, which is not as healthy as the U.S. Those trade tensions with China are not going away.”

Signs of the trade war’s toll are surfacing not just in the United States and China but all over the globe. Central bank leaders in Europe, Asia and Australia have announced interest rate cuts in recent weeks, attributing the need for economic stimulus to the fallout from the trade war. And on Wednesday, Germany announced that its export-driven economy had shrunk .1 percent between April and June, and officials blamed the drop-off on the fallout from the trade war and the looming threat of a hard Brexit by Britain. With another contraction this quarter, Germany would officially be in a recession.