Markets turn south again on renewed trade fears

The Dow was set to plunge 400 points Thursday after the Dow fell nearly 800 points on Tuesday. Tuesday's selling erased nearly $800 billion from the S&P 500's market value, according to S&P Dow Jones Indices.

In a healthy bull market, the selloff would be just a blip — stocks would typically bounce back after a huge sell-off. But with so much volatility in the markets, the market's losses could be a sign of more to come.

Trade continues to sour investors' spirits. Despite a recent truce, the US-China trade war is not over. The tariffs already put in place remain. And new tariffs could be implemented if the two sides fail to make progress.

The arrest of Huawei CFO Meng Wanzhou in Canada renewed doubts about the US-China truce.

And investors have grown very worried about fluctuations in the bond market. The gap between short and long-term Treasury rates has narrowed significantly this week. Before almost every recession, the yield curve has inverted, meaning short-term rates are higher than long-term ones.

So how should you invest in the current climate?

Savita Subramanian, Bank of America's head of US equity and quantitative strategy, will join CNN business correspondent Alison Kosik on "Markets Now" on Thursday to discuss the state of the market and what we can expect in 2019.

CNN's Markets Now streams live from the New York Stock Exchange every Wednesday at 12:45 p.m. ET.

"Markets Now" streams live from the New York Stock Exchange every Wednesday at 12:45 p.m. ET. Hosted by CNN's business correspondents, the 15-minute program features incisive commentary from experts.

You can watch "Markets Now" at CNN.com/MarketsNow from your desk or on your phone or tablet. If you can't catch the show live, check out highlights online and through the Markets Now newsletter, delivered to your inbox every afternoon.

CNN's Matt Egan contributed to this report.

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