Global stocks see-sawed in volatile trade Friday while the dollar sank, as investors jostled to square their books after a brutal week marked by all-out trade war and a dramatic loss of confidence in U.S. assets as anchors of market stability.

The dollar slid to its lowest in 10 years against the Swiss franc and a six-month low against the yen as investors sought other safe haven assets. The euro surged 1.7% to $1.13855, a level last seen in February 2022 and gold, seen as a safe asset during times of crisis, hit another record high.

Investors are grappling with worries over the escalating Sino-U.S. trade war after U.S. President Donald Trump ratcheted up tariffs on Chinese imports, raising them effectively to 145%.

On Friday, China hit back, hiking its tariffs on U.S. goods to 125%, from 84%, helping unleash another wave of money into other markets, such as Europe, where the euro roared to more multi-year highs against the dollar and the Chinese yuan.

An overnight selloff in U.S. Treasuries abated but left the 10-year note yield at 4.4%, still up about 45 basis points in the week, its biggest increase since 2001, LSEG data showed. Bond yields go up when prices go down.

"U.S. and China tariffs are now so high on one another, it’s easy to argue trade in most goods will come to a complete stall apart from essential items and those with high margins. US-China commercial flows will be in freefall casting doubt on the long-term and short-term role of the dollar," Mizuho head of fixed income, currencies and commodities strategy Jordan Rochester said.

European stocks pared earlier losses to trade up around 0.1% on the day, having fallen by as much as 1% previously. The STOXX 600 is still down around 1.7% this week, one of its most volatile weeks on record.

U.S. Treasury Secretary Scott Bessent tried to assuage sceptics by telling a cabinet meeting on Thursday that more than 75 countries wanted to start trade negotiations. Trump himself expressed hope of a deal with China, the world's No. 2 economy.

But James Athey, fixed income manager at Marlborough, said the outlook remains clouded in more uncertainty than it did a month ago: "There are still so many unanswered and unanswerable questions."

U.S. futures for the S&P 500 and Nasdaq were up almost 1%, but trading was highly erratic, with both having traded down as much as 2% earlier before rallying as much as 1.6%.

The anxiety about tariffs has sparked a renewed rush into safe havens, after a brief but massive relief rally following Trump's move on Wednesday to temporarily postpone tariffs on many countries.

"The short-term outlook for global risk assets remains uncertain given growth and inflation concerns, fluid sentiments and fast-changing developments on the trade and tariff fronts," said Vasu Menon, managing director of investment strategy at OCBC Bank in Singapore.

RECESSION FEARS

A violent U.S. Treasury selloff this week, evoking the COVID-era "dash for cash", has reignited fears of fragility in the world's biggest bond market.

Thirty-year bond yields rose to 4.90%, on course for their biggest weekly jump since at least 1982, LSEG data showed.

"What we are seeing in U.S. bond markets is not currently about inflation concerns," said Michael Krautzberger, Global CIO Fixed Income at Allianz Global Investors.

Krautzberger said the price action in Treasuries could be reflecting investor fears that a sharp growth slowdown, or recession, "makes an already unsustainable U.S. fiscal outlook even worse."

"On the other hand, we could just be witnessing a rebalancing among institutional investors or a deleveraging from levered funds."

In commodities, gold hit another record high, rising 1.2% to $3,212 an ounce.

Oil prices rose on Friday, but still headed for a second straight week in the red on concerns about a prolonged trade war between the United States and China. Brent crude futures were last up 0.35% at $63.54 a barrel.