U.S. equities closed lower on Thursday, but well off their lows, as investors digested a massive global sell-off, falling oil prices, and chatter about a possible OPEC production cut.
However, the blue chips index bounced back sharply after Dow Jones cited comments from the energy minister of the United Arab Emirates on Sky News Arabia saying OPEC members were ready to cooperate on a production cut. Suhail bin Mohammed al-Mazrouei also said low prices were already forcing non-OPEC members to cap production.
"We've heard this chatter enough times over the past month so take it with a grain of salt. Either way though, we've reached an extreme threshold of pain that this talk is even taking place," Peter Boockvar, chief market analyst at The Lindsey Group, said in a note.
The blue chips index closed 250 points lower after the report's release.
However, Adam Sarhan, CEO of Sarhan Capital, said the bounce could be due to some technical buying, noting that the OPEC report came out at 2:31 p.m. ET, but stocks didn't hit session lows until about 2:36 p.m. ET.
"I think you're in a situation where the market is in deeply oversold levels. ... At some point, it's got to bounce," said Adam Sarhan, CEO of Sarhan Capital. "But make no mistake about it, the overall trend is down."
The S&P 500 dropped 1.2 percent, as financials posted their first five-day losing streak since August. At session lows, S&P briefly broke below its Jan. 20 intraday low of 1,812.29 when it hit 1,810.01.
"There's a chance we break below the 1,800 level, and then the next level to watch is 1,775," said Peter Cardillo, chief market economist at First Standard Financial. "I think we could see a bounce there. Otherwise, we're in trouble."
The Nasdaq composite briefly turned positive shortly ahead of the close, as Amazon and Cisco Systems rose 2.7 percent and 9.6 percent, respectively. The index, however, closed 0.4 percent lower
Randy Warren, chief investment officer at Warren Financial Service said "I think there's just tremendous wealth destruction going on. ... Unless sovereign wealth funds are done selling, we're not going to see a respite."
Overseas markets fell sharply on Thursday, as Chinese H shares falling about 5 percent, while the pan-European STOXX 600 closed 3.68 percent as banks in the region plunged On Wednesday, European banks soared, momentarily halting a massive plunge.
MSCI's All-Country World Equity index also closed in bear market territory, down 20.18 percent from its 52-week high.
"Investors have become increasingly concerned with [economic growth]," said Kate Warne, investment strategist at Edward Jones. "This represents an opportunity for investors looking past the short-term volatility. We didn't get any news suggesting the global economy is slowing down."
European markets were also surprised by the Swedish central bank cutting rates further into negative territory.
"I'll say this again, the arbitrary desire on the part of the Fed, ECB, BoJ, BoE, Riksbank, and SNB for 2% inflation has truly wrecked havoc on the global economy and has lit major financial instability," Boockvar said.
The sell-off in global equities sent traditional safe havens surging.
Gold futures for April delivery settled $53.20 to trade at $1,247.80, while U.S. 10-year note yields traded at 1.64 percent. The benchmark note yield also went below 1.55 percent momentarily.