US-China tensions rattled markets again on Thursday, after the bombshell that Canada had arrested a Huawei executive at Washington’s behest. But major equities benchmarks clawed back from big losses on news that the US Federal Reserve was reconsidering its path for interest-rate increases.

The S&P 500 and Dow Jones Industrial Average were down 0.15% and 0.32%, respectively, after plunging more than 2% earlier in the day. The Nasdaq climbed into the green, up almost 0.5% at close.

The Wall Street Journal reported on Thursday afternoon that Fed officials are “considering whether to signal a wait-and-see mentality” once they go ahead with an expected rate increase this month.

The new “data-dependent” policy could mean that the Fed will hold back on the next rate hike expected in March.

“We need to be attuned to … the possibility that the US economy could look very different in the first quarter, first half of 2019 than it does now,” Dallas Fed president Robert Kaplan was quoted as saying in an interview on Thursday.

Subdued inflation, Kaplan said, gives Fed policymakers “some latitude to be patient.… There are times when the smartest thing you can do is turn over a few cards and do nothing.”