Stocks are swinging higher on Wall Street Thursday after erasing steep earlier losses caused by a worse-than-expected report on inflation, the latest set of corkscrew moves to rock financial markets.

The S&P 500 was 0.9% higher in midday trading, a neck-snapping turn after being down as much as 2.4% in the morning and touching its lowest level in nearly two years. Other markets also veered suddenly from sharp losses to gains.

Besides stocks, prices also fell sharply for bonds, cryptocurrencies and other investments immediately after the U.S. government released its report showing inflation is spreading more widely across the economy. One component that's closely followed by policy makers and investors accelerated to its hottest level in 40 years.

That’s forcing investors to brace for continued, big hikes to interest rates by the Federal Reserve to get inflation under control, and the potential recession those moves could create.

But trading remains very shaky across financial markets.

The Dow Jones Industrial Average went from an early loss of 549 points to a midday gain of 381, or 1.3%, to 29,585. The Nasdaq swung from an early 3.2% loss to a 0.7% gain by 11:30 a.m. Eastern time.

Stocks in Europe also flipped from losses caused by the U.S. inflation data as the day progressed, while Treasury yields pulled back a little from their initial surge. They're the latest jagged, back-and-forth moves for markets, which have been swinging sharply due to all the uncertainties about economies around the world and how badly higher interest rates will hurt them.

Most investors came into the morning already expecting the Fed to hike its key overnight interest rate by three-quarters of a percentage point next month, which would be its fourth straight hike that was triple the usual size.

But Thursday’s disappointing data means many investors now expect a fifth such increase in December, dashing hopes that the Fed may begin downshifting soon. Bets are increasing that the Fed could pull its overnight rate above 5% by early next year. It started this year at virtually zero.

Higher rates make buying a house, car or anything else purchased on credit more expensive, and the hope is that will slow the economy and job market enough to undercut inflation. But higher rates take a notoriously long time to take full effect, and the Fed risks causing a recession if it ends up going too far.

“If the Fed insists on continuing to hike until the numbers improve, they are going to over-hike,” said Brian Jacobsen, senior investment strategist at Allspring Global Investments. “They’re swinging from doing too little to doing too much. Those two vices don’t cancel out.”

The growing expectations for an even more aggressive Fed sent Treasury yields jumping. The yield on the 10-year Treasury, which helps set rates for mortgages and many other loans, soared to 3.97% from 3.90% late Wednesday, near its highest level in more than a decade. Earlier in the day, it topped 4%.

The two-year yield, which moves more on expectations for Fed action, rose to 4.44% to from 4.29%. It crossed above 4.50% earlier in the morning.

Higher yields amp up the pressure on the economy not only by making loans more expensive and slowing growth. They also drag down prices for stocks, cryptocurrencies and nearly every other investment because they mean bonds are paying more in interest, which pulls some dollars away from other investments.

Investments seen as the riskiest, the most expensive or forcing investors to wait the longest for big growth have been the ones hit hardest by this year’s rise in rates.

The inflation report hit Wall Street just as companies gear up to report how much profit they earned during the summer.

If they could report big growth, that would give some major support to stock prices even as the worries about higher-for-longer rates roil markets. But analysts have been highlighting the pressures created by high inflation, high interest rates and the soaring value of the U.S. dollar against other currencies, which dilutes the dollar value of sales made abroad.

“Earnings season might not be bad,” said Yung-Yu Ma, chief investment strategist at BMO Wealth Management, “but being strong enough to reverse this tide will be a tough go.”

Domino's Pizza jumped 9.4% for the biggest gain in the S&P 500 following its earnings report. Its profit for the latest quarter fell short of analysts' expectations, but it made more in revenue than forecast.