A maelstrom of anxieties dragged down global markets Tuesday, as ongoing Brexit chaos and worrisome manufacturing data dovetailed with a tense impasse in the U.S.-China trade war.

The latest rounds of tariffs from both nations took hold over the weekend, with each piling on to the hundreds of billions of dollars in imports already tied up in the drawn-out conflict. Despite dovish remarks from leaders on both sides late last week, there has been no official word on when new negotiations will take place. On Monday, Beijing lodged its third complaint against the United States with the World Trade Organization, saying Washington’s latest duties violated an agreement reached at the Group of 20 summit in Osaka, Japan.

The Dow Jones industrial average plunged 425 points at its deepest depth Tuesday morning, but the blue chips staged a mini-rally in the last hour of the session. It finished at 26,118, down 285 points or 1 percent. The tech-heavy Nasdaq finished the day at 7,874, an 88-point decline, or about 1.1 percent. Tech stocks were hit hard, with Apple, Microsoft and IBM lower. The broad Standard & Poor’s 500 closed the first trading day of September at 2,906, a loss of 20 points, or 0.7 percent.

U.S. markets kicked off September after a particularly volatile August, which included several big one-day tumbles for the Dow. August also saw the yields — or returns — on short-term U.S. bonds eclipse those of long-term bonds for the first time since the financial crisis, a phenomenon that has preceded every recession since 1955 and signals that investors are scrambling for safer assets.

In tweets Tuesday, Trump insisted negotiations with China were going well, then threatened to crack down even harder on the world’s second-largest economy if he wins reelection in 2020 and hinted he may target the European Union next.

“For all of the ‘geniuses’ out there, many who have been in other administrations and ‘taken to the cleaners’ by China, that want me to get together with the EU and others to go after China Trade practices remember, the EU & all treat us VERY unfairly on Trade also,” Trump tweeted. “Will change!”

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In an interview Tuesday with CNBC, one of Beijing’s trade advisers said that the burden of ending the trade war sits squarely with Trump. Wang Huiyao, president of Center for China and Globalization, a Beijing-based think tank, said that China has made “all efforts” to address U.S. complaints.

“It’s up to the U.S. to really go ahead and be flexible and not take a really harsh attitude on this,” Wang said on CNBC. He added: “We cannot have a perfect deal. You can see that China has continued to open not for the U.S.’s sake and interest but for China itself.”

The U.S. manufacturing sector contracted in August for the first time since 2016, according to an IHS Markit industry report. The Manufacturing Purchasing Managers’ Index fell to its lowest level since September 2009, while new export orders fell at their quickest pace in a decade, “linked by many firms to trade wars and tariffs."

Though manufacturing is a relatively small sector of total U.S. output at around 12 percent of gross domestic product, it is seen as a barometer for economic health. As the manufacturing sector in August signals a contraction, it suggests inflation risk is low but the potential for a U.S. recession is more likely.

“The manufacturing sector has broken and is now in a recession,” Chris Rupkey, chief financial economist at MUFG Union Bank, wrote in a note to investors Tuesday. “The US trade war with the world has blown open a great big hole in manufacturers’ confidence, and it will be a miracle if the broader economy can continue to roll on with manufacturing in decline.”

Eight of 11 U.S. stock market sectors were lower on Tuesday. Real estate, utilities and consumer goods, all safe-havens when people fear a market drop, finished positive. The big U.S. manufacturing companies saw their stocks slide following the report. Boeing was the biggest drag, dropping 2.7 percent. Industrials, financials and energy companies were weighing heavily on the Dow, with Goldman Sachs and American Express leading the financials downward. Chevron and Exxon dropped on lower oil prices. Pfizer and Procter & Gamble were the blue chip’s best performers.

Boeing shares were hurt Tuesday following a report over the weekend that its workhorse 737 Max could remain grounded through the lucrative fall and holiday seasons because of friction with federal regulators.

The British pound sank to its lowest level since October 2016, as rebel members of Parliament prepared to push for a three-month Brexit delay in defiance of Prime Minister Boris Johnson’s plan for Britain to exit the European Union by the end of October, with or without a deal.

“The market hates uncertainty and that extends to politics. The current chaos around the UK exiting the E.U. threatens to push down sterling even further unless we get a clear idea of what is happening and when,” Russ Mould, investment director at AJ Bell, said in a note to investors Tuesday.

The European benchmark Stoxx 600 rallied from its lows, finishing down 0.23 percent.

The trade war has dragged on for more than a year, and fears are rampant that the conflict is sparking a global slowdown. Japan announced Monday that its manufacturing spending had fallen for the first time in two years during the second quarter, a development that experts see as further evidence of the trade war’s dampening effect. Central banks in Europe, Asia and Australia have all cut interest rates in recent months, citing the need for economic stimulus.

Meanwhile, China’s yuan fell to an 11-year low in offshore trading Tuesday. China’s economic growth has slowed to its lowest rate in 27 years, as factory output declines and unemployment rises. On Tuesday, China reported its biggest one-month drop-off in iron-ore prices in nearly eight years, marking a major slowdown for the producer of more than half the world’s steel.

At home, fallout from the trade war is spurring recession fears. Last week, the U.S. Commerce Department said U.S. economic growth had slowed more in the second quarter than previously thought. Gross domestic product grew at an annualized rate of 2 percent, the department said, revised down from an estimate of 2.1 percent last month.

The bond market has also been a nettlesome factor for investors that are desperate for stable ground. The U.S. bond market is one of the few places in the world where bond investors can park their money for long periods and collect a positive return. When bond prices rise, the yield that investors earn on their money drops. That has contributed to the inversion that is stoking recession fears. The yield on the 10-year U.S. Treasury on Tuesday hit its lowest level in three years.

Tuesday’s manufacturing data showing a contraction only added to the worries about the global economy. Investors flocked to buy even more U.S. bonds as they worried the data reflects low inflation, or even a potential recession.

“The ISM data is a lot weaker than expected, in particular to new orders,” said Joe LaVorgna, chief economist at Natixis. “That’s creating tremendous demand for U.S. Treasuries.”