Wall Street trimmed steep losses in afternoon trading Thursday, following remarks from President Donald Trump, who expressed some optimism about reaching trade agreements, particularly with China.

"Would love to be able to work a deal with China," Trump told reporters at the White House. "I think we will end up working out something good for both nations."

Trump raised the tariff on imports from China, America's largest trading partner, to 125% on Wednesday.

"I think it's going to work out," Trump added.

Markets reacted swiftly. By 2:50 p.m. ET:

  • The S&P 500 - tracked by the SPDR S&P 500 ETF Trust (SPY  ) - was down 3.2%
  • The Nasdaq 100 trimmed its decline to over 3.8%
  • The Russell 2000 was off 3.68%.
  • The Dow Jones Industrial Average also recovered, paring earlier losses from over 4% midday to 2.34%.
At midday, the S&P 500 was down 4.8%, the Nasdaq 100 had plunged 5.4%, and the Russell 2000 had dropped 5.3%, wiping out nearly half of Wednesday's historic gains.

10% Baseline

Trump also attacked past trade policies, blaming NAFTA for the loss of nearly 90,000 factories and six million jobs-losses he claimed could have been avoided if tariffs had been in place earlier.

"We're going to bring them all back," Trump said.

Trump highlighted that the European Union initially planned to retaliate against U.S. tariffs but held back after seeing the U.S.'s aggressive stance against China. "They were very smart," he said.

He also mentioned flexibility in tariff negotiations, suggesting that each country or company might be treated differently depending on the circumstances.

"It's possible that I would consider flexibility for countries and companies," Trump said. "10% tariff is a baseline. But deals are all different, every country is different."

Trump laid out potential uses for the money raised through tariffs, including paying down national debt, reducing the budget and creating border walls.

Market Reactions: Gold Eyes Record Close

At last check Thursday, Benzinga Pro data showed:

Yields on 30-year Treasury notes were still 8 basis points higher on the day to 4.82%, yet slightly trimming earlier spike during the session.

Gold, as tracked by the SPDR Gold Trust (GLD  ), traded 2.5% higher to $3,160 per ounce, on track to close at fresh record highs.

Bitcoin fell 3.9% to below $79,500, erasing nearly all Wednesday's gains occurred following the 90-day tariff pause announcement.