Having shed 420 points yesterday, the Dow Jones average looked as if it might give a repeat performance today, falling as low as 24,218 at one point before recovering to close at 24,538.
Dealers were taking fright at a plan announced by President Trump...
About 9.0 billion shares changed hands on USA exchanges. The S&P 500 added 0.3%, and the Nasdaq Composite advanced 0.6%. It was down as much as 586 points earlier. The Nasdaq fell 92 points, or 1.3 percent, to 7,180.
Best Buy jumped around 5 percent after it reported strong same-store sales for the fourth quarter, recovering from falls overnight due to the US consumer electronics retailer's announcement of 250 small mobile phone store closures.
For the month, the Dow lost 4.3% and the S&P 500 fell 3.9%.
The worst performing sectors were energy, materials, and health care down 2.2%, 1.7%, and 1.5%, respectively. That could weaken stocks, which have been boosted by low rates.
Trump has vowed to take steps to crack down on imports of steel and aluminum and has been considering imposing hefty tariffs or quotas on imports of the metals from China and other countries under a national security law. "He may be able to persuade his core voter base of that but investors are far from convinced, as was evident by the market reaction to the announcement [of import tariffs on steel and aluminum]", said Craig Erlam at Oanda.
"Investors are grappling with the prospects of higher than expected interest rates and inflation, and a potentially more hawkish Fed", said Chris Zaccarelli, chief investment officer at Charlotte, North Carolina-based Independent Advisor Alliance.
European markets closed mostly lower: London's FTSE 0.1 per cent, Paris closed flat and Frankfurt was 0.3 per cent lower.
Earlier in the week, Powell helped send Treasury yields jumping and stocks tumbling when he said that he's feeling more optimistic about the economy.
"If the Federal Reserve raises rates more quickly than previously expected, then it's likely to put a damper on stocks in the near term".
On Thursday, though, he said that "I would expect that some continued strengthening in the labour market can take place without causing inflation".
The department store operator's shares rose 2.5 percent in premarket trading.
Reuters is reporting NY regulators have asked lenders for information on Trump administration adviser Jared Kushner and his family's real estate company .
Dental supplies maker Patterson Companies plunged 22 percent after reporting weak earnings for the latest quarter.
The company declared a final dividend of 1.74 cents per share. Crude oil was again decidedly negative in the session.
At presstime oil is down 30 cents to $61.34 US per barrel, gold is down 50 cents to $1317.40 U.S.an ounce, and the loonie is up slightly to 77.95 cents U.S. Brent crude, the global standard, lost 94 cents, or 1.5 per cent, to $63.79 a barrel.
The dollar dipped to 106.40 from 106.66 yen late Wednesday. The euro fell to $1.2179 from $1.2202. Nasdaq 100 futures rose 0.2%.