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Stocks rebounded slightly on Thursday—reversing some of the steep declines in August—as investors continue to worry about a period of prolonged rate hikes from the Federal Reserve, while market experts warn of further volatility ahead and rising recession risks.


Stocks were on pace for a five-day losing streak before a rebound late in the day: The Dow Jones Industrial Average was up 0.4%, over 100 points, while the S&P 500 gained 0.3% and the tech-heavy Nasdaq Composite lost 0.3% .

Markets initially fell after weekly jobless claims came in at 232,000—the lowest level since late June, in a sign that the jobs market remains “extraordinarily strong” despite ongoing Fed rate hikes and a slowing economy.

Stocks have continued to struggle since Fed chair Jerome Powell’s Jackson Hole speech last Friday, with his comments about raising interest rates “higher for longer,” sparking a selloff that saw the Dow plunge 1,000 points on the day.

As investors now bet on more rate increases, government bond yields have surged higher in recent days, with the yield on the two-year Treasury note at one point surpassing 3.15% on Thursday, its highest level since late 2007.

With Fed officials continuing to indicate that the central bank won’t take its foot off the pedal with interest rate hikes anytime soon, experts warn stocks could retest their June lows, especially as September is a historically bad month for markets.

Chipmaker stocks, meanwhile, were hard-hit on Thursday amid news that the US government would ban sales of AI chips to China, with shares of Nvidia and Advanced Micro Devices falling more than 11% and 6%, respectively.