A sharp sell-off in U.S. government bond markets and the dollar has set off fears about the growing fallout from President Donald Trump’s tariffs, raising questions about what is typically seen as the safest corner for investors during times of turmoil.

Yields on 10-year Treasuries — the benchmark for a wide variety of debt — whipsawed Wednesday after Trump paused the bulk of the levies he had threatened the week before and raised the rates charged on Chinese goods after that country retaliated. The reversal sent U.S. stocks soaring.

After the announcement, the 10-year bond traded at 4.35%, slightly lower than earlier in the day but still well above recent levels. Just a few days ago, it had traded below 4%. Yields on the 30-year bond reversed an earlier rise that had lifted it above 5%. It now stands at 4.74%. Selling intensified for short-term government bonds, with the two-year yield surging nearly 0.2 percentage points to 3.9%.

Amid the tumult, other markets considered alternative safe havens to the United States have gained. Yields on German government bonds, which serve as the benchmark for the eurozone, fell Wednesday, indicating strong demand. Gold prices rose, too.

The U.S.-centric volatility comes on the heels of investors fleeing riskier assets globally in what some fear had parallels to an episode known as the “dash for cash” during the pandemic, when the Treasury market broke down. The recent moves have upended a long-standing relationship in which the U.S. government bond market serves as a safe harbor during times of stress.

Adding to Wednesday’s angst was the fact that the U.S. dollar, which is the world’s dominant currency and was largely expected to strengthen as Trump’s tariffs came into effect, had instead weakened. It shaved some of those losses after the administration’s announcement.

“The global safe-haven status is in question,” said Priya Misra, a portfolio manager at J.P. Morgan Asset Management. “Disorderly moves have happened this week because there is no safe place to hide.”

U.S. Treasury Secretary Scott Bessent sought to tamp down concerns Wednesday, attributing the bond market sell-off to investors who bought assets with borrowed money and were now having to cover their losses.

“I believe that there is nothing systemic about this — I think that it is an uncomfortable but normal deleveraging that’s going on in the bond market,” he said in an interview with Fox Business. Speaking to reporters after the pause was announced, Bessent said financial markets had gotten more “certainty” with the latest announcement.

In remarks later that afternoon, Trump acknowledged that investors in the bond market had gotten “a little queasy” the night before.

“I was watching the bond market,” he said. “The bond market is very tricky, but if you look at it now, it’s beautiful.”

To explain some of Wednesday’s sell-off, traders had pointed to one particular strategy known as the “basis trade,” in which hedge funds seek to exploit price differences in the Treasury market by selling futures contracts and buying the comparatively cheap underlying securities. Those bets are often amplified using borrowed money, which can juice returns but also magnify losses if the market shifts in the wrong direction. Back in 2020, that bet blew up, causing dysfunction in the Treasury market that eventually got so extreme it prompted the Federal Reserve to take action.