Warnings are sounding in global financial markets, punctuated by a cascade of selling in everything from stocks and crude oil to metals like iron ore. Trade war and recession fears have caused nervous investors to seek refuge by piling into gold, government bonds and even bitcoin. Some fear the wild market action is a precursor to deeper turbulence reminiscent of the one that swept over Wall Street late last year. “There is a high probability that we go into another December scenario, which was a black hole for almost all asset classes except Treasuries and gold,” Daryl Jones, research director at Hedgeye, told CNN Business. Recession jitters drove the S&P 500 down by 9% last December. It was the index’s worst December since the Great Depression. Jones, whose firm turned bearish last October, said those kinds of market drops are scary because “you don’t know where the bottom is.” The latest bout of market turbulence erupted on August 1 after President Donald Trump shocked investors by escalating the trade war with China. Investors fear that the United States’ latest tariffs on China, scheduled to go in effect on September 1, will worsen the ongoing slowdown in global growth. “We may well be at the most dangerous financial moment since the 2009 Financial Crisis,” former US Treasury Secretary Larry Summers, a Clinton appointee, said Monday on Twitter. Risk of ‘Lehman-like’ volatility Nomura strategist Masanari Takada echoed Summers’ comments, warning in a note the following day that the next spike in volatility “could be Lehman-like.” Takada argued that the market’s sudden swings between optimism and pessimism over the trade war resemble the mood swings last decade over how the subprime mortgage crisis would play out. “Even if US stock market sentiment were to start picking up,” Takada wrote, “it may well collapse again in late August or early September.” The S&P 500 has retreated about 4% since Trump announced those new tariffs, which for the first time will hit a broad swath of consumer goods. Morgan Stanley has warned US stocks will likely suffer a correction of 10% before the end of September. Iron ore plunges 18%, gold soars above $1,500 The market moves have been even more extreme in other corners of Wall Street. Brent crude, the global benchmark, officially entered a bear market this week, meaning it has declined more than 20% from recent highs. US oil prices, which succumbed to a bear market in June, lost another 5% on Wednesday. Iron ore and copper, two economically sensitive metals, have also been under heavy pressure. Iron ore has dropped 18% since August 1, according to Goldman Sachs. Bond yields collapsed on Wednesday, with the 10-year Treasury rate briefly sinking below 1.6% for the first time since the fall of 2016. That marks a stunning decline compared with its yield of 3.2% last November. The yield curve, a reliable recession indicator in the past, has inverted to levels unseen since 2007. The yield curve measures the gap between short-term and long-term rates. During normal times, longer maturing bonds pay out higher yields than their shorter duration peers. But that relationship has flipped upside down, alarming many investors. Gold prices have topped $1,500 an ounce for the first time since 2013. Goldman Sachs predicted gold will hit $1,600 within six months. Even cryptocurrencies have enjoyed the flight to safety. Bitcoin briefly topped $12,000 on Wednesday. “That’s a sign that people are very anxious,” Summers, speaking of the broad flight to safety, told Bloomberg on Tuesday. “There is a growing risk that this trade conflict between the United States and China will broaden and get out of control.” Recession risk on the rise Although investors are clearly growing worried about a recession, that doesn’t necessarily mean the economic expansion is over. US households are still spending and corporate America remains profitable, even if earnings are shrinking. “We do not envision an US recession during the next 12 months,” Evan Brown, head of macro asset allocation strategy at UBS Asset Management, wrote in a note to clients on Wednesday. Hedgeye’s Jones agrees, predicting a “slow patch” for the US economy rather than a full-blown recession. That doesn’t mean the stock market is in the clear, however, especially given the recent surge to record highs that left stocks looking expensive. “You don’t need a recession for the stock market to be down 20% to 25%,” Jones said. “Anywhere you look, valuations look extended.” A 20% decline would mark the end of the bull market, which began in March 2009 and last summer became the longest in American history. Lately, stocks have become more expensive based on common valuation metrics. For instance, last week the S&P 500 traded at 16.8 times expected earnings, according to FactSet. That’s well above the 10-year average of 14.8. One big wild card is the Federal Reserve, which could help restore confidence among investors by heeding Trump’s call for more easy money. Jones said his firm’s call for a “bearish black hole” depends on whether the Fed comes to the rescue by voicing support for even larger rate cuts than Wall Street is pricing in. “That’s what saved us in December,” Jones said.