NEW YORK (AP) -- U.S. stocks dropped in another dizzying day of trading on Thursday as investors dissected Federal Reserve Chairman Jerome Powell's latest testimony before Congress and the possibility of stiff tariffs on steel and aluminum imports.
Stocks were higher earlier in the day after Powell appeared to calm one of the market's main worries when he said that he does not see inflation in workers' wages "at a point of acceleration." Investors have been nervous about the possibility that the Fed may get more aggressive about raising interest rates to beat down inflation.
But stocks slid in the afternoon after President Donald Trump told steel and aluminum executives that he'll impose tariffs on imports next week.
KEEPING SCORE: The Standard & Poor's 500 index was down 27 points, or 1 percent, at 2,685 as of 1:25 p.m. Eastern time. It was up as much as 0.6 percent and down as much as 1.2 percent in choppy trading earlier. The index is coming off its worst month in two years, when concerns about higher inflation and rates helped trigger a 10 percent drop.
The Dow Jones industrial average fell 374 points, or 1.5 percent, to 24,645, and the Nasdaq composite lost 83, or 1.2 percent, to 7,190.
FED SPEAK: Powell's testimony before the Senate Finance Committee was highly anticipated, as worries about the possibility of much higher interest rates have been at the center of the market's troubles over the last month.
Earlier in the week, he helped send Treasury yields jumping and stocks tumbling when he said that he's feeling more optimistic about the economy. Some traders took that as a signal that the Fed may raise rates more quickly than expected.
On Thursday, though, he said that "I would expect that some continued strengthening in the labor market can take place without causing inflation."
TRADE TROUBLES? One recent fear for investors has been the possibility of a trade war, where countries throw up barriers that hurt the global economy and profits for exporting companies.
Shares of steelmakers swung wildly amid speculation that the U.S. government would impose tariffs or quotas on steel and aluminum imports. They surged in the morning following reports that the White House planned to make the announcement shortly, only to lose most of the gains when subsequent reports said the announcement may not happen. They rose again after President Donald Trump told industry executives that he'll impose import tariffs "next week."
U.S. Steel was up $3.73, or 8.6 percent, to $47.25, and AK Steel jumped 52 cents, or 10.1 percent, to $5.68.
Industrial companies that could be hurt by higher steel prices fell. Heavy equipment maker Caterpillar lost $3.12, or 2 percent, to $151.54 and aerospace giant Boeing gave back $8.59, or 2.4 percent, to $353.70.
YIELDS: The yield on the 10-year Treasury note dipped to 2.83 percent from 2.86 percent late Wednesday. The two-year yield slipped to 2.23 percent from 2.26 percent, and the 30-year yield dropped to 3.11 percent from 3.13 percent.
SEC CALLING: Overstock.com dropped 5 percent after the online retailer disclosed in a regulatory filing that the Securities and Exchange Commission asked the company last month for information about a $250 million offering by its blockchain subsidiary, tZero, related to digital tokens. The stock sank $2.90 to $57.48. It was down as much as 10 percent earlier.
The disclosure follows a report in the Wall Street Journal that the SEC sent subpoenas to dozens of companies demanding information about initial coin offerings and cryptocurrencies, which aren't bound by the same rigorous rules that govern public offerings of stock.
BUSY ECONOMIC DAY: A raft of reports on the economy provided a mixed picture.
One report showed that inflation remains below the Fed's preferred target of 2 percent, but economists said that the advance for inflation in recent months has been enough to keep the Fed on track to continue raising interest rates. It raised rates three times last year, and investors are debating whether it will add another three or four increases this year.
Other reports showed that manufacturing is growing at its fastest rate in nearly 14 years, while construction spending was weaker than economists expected last month.
SHARP BITE: Patterson Companies fell to the biggest loss in the S&P 500 after it reported weaker earnings for the latest quarter than analysts expected and said that its chief financial officer was leaving. Shares of the company, which sells dental and animal health products, dropped $7.57, or 24 percent, to $24.01.
COMMODITIES: Oil prices continue to drop following a report on Wednesday that showed more crude supplies in inventories last week than analysts expected. Benchmark U.S. crude fell 49 cents to $61.19 per barrel. Brent crude, the international standard, lost 62 cents to $64.11 per barrel.
Gold dropped $5.50 to $1,312.40 per ounce.
CURRENCIES: The dollar inched up to 106.86 from 106.66 yen late Wednesday. The euro inched up to $1.2207 from $1.2203, and the British pound slipped to $1.3732 from $1.3771.
OVERSEAS: France's CAC 40 fell 1.1 percent and Germany's DAX was down 2 percent. The FTSE 100 in London dropped 0.8 percent. In Asia, Japan's Nikkei 225 lost 1.6 percent and Hong Kong's Hang Seng rose 0.6 percent.