Global markets experienced a tumultuous trading day on Thursday following the arrest of a senior executive from China's Huawei telecommunications company in Canada and a weakening of concern over Washington's and Beijing's ability to permanently set the truce.

The US S & P 500 fell by as much as 2.9 percent, causing investors to look for safer assets, but plodded back to finish the day at 0.2 percent. The Dow Jones Industrial Average closed 0.3 percent after dropping 3.1 percent, while the Nasdaq gained 0.4 percent by the end of the day.

The turbulence led investors to seek the security of highly rated government bonds. The 10-year government bond yield dropped to a 4-month low of 2.82 percent, before it stood at 2.88 percent per day.

Traders have also stopped betting on the Federal Reserve's rate hikes next year, and analysts said the late recovery in New York's trading was apparently driven by expectations that the Fed will "pause" interest rate hikes in 2019.

Assuming that policymakers move up by a quarter of a percentage point in December, the futures of the Fed funds calculated a 34 percent chance that the central bank will not touch interest rates next year, and a 36 percent chance raise interest rates only once. Markets are now pricing with a probability of only 4 percent that the central bank will raise rates three times when it was signaled in September.

The comeback in the afternoon of the US stock market came too late to save the difficult day for other big markets. The European Stoxx 600 index ended Thursday down 3.1 percent – its worst daily performance since the UK left the EU in 2016 – at its lowest level in over two years. The British FTSE 100 Index slumped 3.2 percent, the biggest drop since the Brexit vote.

"The stock market signals a recession is on the horizon, a manmade recession, with two consecutive trading days of heavy losses that have forced investors to exit," said Chris Rupkey MUFG analyst.

The FTSE All-World Index, which measures $ 54 trillion of global equities, declined 1-percent to the trading end Thursday and increased its loss this year to almost 7 percent.

The decline on the European stock exchanges accelerated earlier, after Saudi Arabian energy minister Khalid al-Falih had pointed out that the meeting of Opec manufacturers in Vienna was aimed at cutting back on production, which may have failed to meet traders' expectations.

As a result, Brent, the international benchmark, fell 2.2 percent, hitting stocks of oil companies like BP.

Chinese equities fell and the benchmark CSI closed 2.2 percent following the arrest of Meng Wanzhou, Chief Financial Officer of Huawei and his founder's daughter, following a US release request in Vancouver.

The sensational detention comes as doubts arise as to whether the ceasefire agreed by Presidents Donald Trump (USA) and Xi Jinping (China) at the G20 summit in Argentina will lead to an agreement that will strengthen relations between restores the world's two largest economies.

"While China may impose fines, investigations and market restrictions on its national champion, we do not believe it will tolerate the arrest of a CFO," said Laban Yu, investment strategist at investment bank Jefferies. If the US has not changed course, "trade negotiations are seriously endangered."

Western governments have put pressure on Huawei, whose founder and chief executive Ren Zhengfei is a former officer of the People's Liberation Army. The company, which has been at the center of concern over corporate espionage and cybersecurity, has denied connections with China's security services or the military.

The fear of trading is becoming increasingly difficult as most of the major asset classes are in negative territory and US government bonds have rallied strongly over the last month. This warns in the spring of a warning signal for a weakening of the US economy next year.

The growing concern about the trade also hit the foreign exchange market and hit the Chinese currency. The Chinese renminbi, which traded in the Chinese domestic market, fell 0.5 percent against the US dollar and weakened from the highs of 6.8308 Rmb this week. Earlier this week, it had booked its biggest two-day rally in more than a decade.