U.S. stocks plunged at the start of trading Wednesday as Trump escalated and China retaliated in a deepening trade dispute.

The Dow Jones industrial average lost more than 500 points as trading opened before settling down about 50 points by lunchtime. The Standard & Poor’s 500-stock index and tech-heavy Nasdaq also dropped sharply out of the gate and then made up ground.

The broad sell-off was in response to the tit-for-tat tariffs that the world’s two biggest economics announced Tuesday, when the Trump administration revealed about $50 billion in Chinese electronics, aerospace and machinery products it plans to hit with tariffs. The move threatens to upend global supply chains for corporations such as Apple and Dell, raise prices for American consumers who have grown accustomed to inexpensive electronics and aggravate tensions between the world’s two largest economies.

China fired back by threatening tariffs on 106 U.S. products, including on soybeans, cars and some airplanes, in the latest escalation of a trade war between the world’s two largest economies.

The news had an immediate impact on markets, where there is broad concern that the current back and forth between the world’s two biggest economies will spiral out of control, putting a hard brake on a humming world economy and what has been a long, sturdy bull market.

“This market impact does not reflect just a $50 billion response from China,” said Chris Zaccarelli of Investment Advisor Alliance, referring to the steep plunges. “The market is reacting to the increased risk that this will escalate.”

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Boeing was the Dow component that was hit hardest in early trading, dropping nearly 4 percent on worries that China’s tariffs could hurt some of the aircraft maker’s business. The aerospace giant has been one of the best performers among the 30 members of the blue chip composite in the last year. United Technologies and chip maker Intel were also lagging in early trading.

U.S. Commerce Secretary Wilbur Ross, appearing on CNBC’s Squawk Box Wednesday morning, said he was dismayed by the big stock shifts.

“This response should not really have suprised anyone,” Ross said during the interview. “I’m frankly a little surprised that Wall Street was so surprised by it. This has been telegraphed for days and weeks.”

Ross called Trump a “lifelong deal maker” and cautioned that “this is not World War III.”

But markets hate uncertainty and are looking for some path to resolution.

“China made it clear they are willing to play tit for tat in this trade conflict,” said Ed Yardeni of Yardeni Research. “What the market is waiting for are signs that there will be some efforts to negotiate this out.”

Markets have been tossed about in 2018 after coming out of a calm and prospcerous stock market in 2017. Investors said people should be resigned to more volatility.

“Obviously investors do not like this type of uncertainty, and so it is not surprising that volatility has risen,” said Wayne Wicker, chief investment officer at ICMA Retirement Corp. “In looking back over the last week or so, the Dow has incurred a number of days of huge point moves. If you look back to 2017, the average move in the Dow was just 68 points. So volatility is back.”

In Asia overnight, Hong Kong’s Hang Seng Index dropped 2.2 percent and South Korea’s main exchange was down more than 1 percent. In Europe, all major markets opened lower, pointing to another expected slump when Wall Street opens.

Soybeans on the Chicago Board of Trade immediately dropped as much as 5.3 percent, while wheat and corn futures also slid, Bloomberg reported.

At a news conference on Wednesday, Chinese officials stressed that Beijing is willing to work with the White House.

“If someone wants a trade war, we will fight to the end. If someone wants to talk, our door is open,” said Wang Shouwen, vice minister of commerce.

Zhu Guangyao, vice minister of finance said both sides were “showing their swords and making demands,” but needed to get back to the negotiating table.

Trump tweeted his own take on the news. “We are not in a trade war with China, that war was lost many years ago by the foolish, or incompetent, people who represented the U.S.,” he wrote, “Now we have a Trade Deficit of $500 Billion a year, with Intellectual Property Theft of another $300 Billion. We cannot let this continue!”

When U.S. exports to China are factored in, analysts tend to put the trade deficit in goods between the two countries closer to $375 billion.

Even the talk of a trade war has set investors on edge.

“It’s the same concerns about the potential of a trade war. China made it clear they are willing to play tit for tat in this trade conflict,” said Ed Yardeni of Yardeni Research. “What the market is waiting for are signs that there will be some efforts to negotiate this out.”