Wall Street on Thursday morning gave up some of its big gains from Wednesday, the best single day of trading in almost a decade.
Rattled by political uncertainty, the Dow Jones industrial average was down more than 400 points. The Standard & Poor's 500-stock index and the tech-heavy Nasdaq composite index were both down 1.9 percent.
December has been brutal for Wall Street. A number of factors, including a trade conflict with China, interest-rate hikes, President Donald Trump's attacks on the Federal Reserve and a partial government shutdown, have rattled investors in the worst month since the financial crisis. Since the Dec. 1, the S&P 500 is down more than 10 percent.
On Wednesday, after a rough 4-day losing streak and a notably bleak Christmas Eve, markets were buoyed by reports of record-breaking holiday retail performances and assurances by Trump that Federal Reserve Chairman Jerome Powell's job was not in jeopardy. The Dow snagged its biggest point gain in history , surging 1,086 points.
But some analysts were not confident the buying would continue.
"While yesterday's rally was very encouraging, we could see some additional selling in the last few days of the year while ongoing concerns over the government shutdown and existing concerns over the near-term economic outlook," Ivan Feinseth, chief investment officer at Tigress Financial Partners wrote in a note to investors Thursday.
Wednesday's success in US markets was also met with skepticism in Asia and Europe, where markets reopened after a Christmas break. Japan's Nikkei 225 index jumped nearly 4 per cent to 20,077 after suffering big losses earlier in the week.
But other Asian markets were relatively neutral. The Shanghai Composite index slipped 0.6 per cent to 2,483.09; the Hang Seng Index was down 0.7 per cent at 25,478.88. In Europe, post-Christmas performance was shaky.
Germany's DAX fell 0.3 per cent to 10,601.98; France's CAC 40 rose 0.8 percent to 4,664.54.
Britain's FTSE 100 was flat at 6,685.64.
The end of 2018 has brought a chain of political surprises, including the sudden resignation of Defense Secretary Jim Mattis and Trump's withdrawal of US troops from Syria against the advice of his national security team. While some predicted Trump might soften his stance in the budget dispute over the border wall after seeing the uncertainty rile the markets, his tweets Thursday morning suggested that the government shutdown might extend into the new year.
"Have the Democrats finally realized that we desperately need border security and a wall on the southern border," the president tweeted. "Do the Dems realize that most of the people not getting paid are Democrats? "