AILSA CHANG, HOST:
It was another rough day for the stock market. Prices dropped sharply this morning, though they did mostly recover by the end of the day. Still, the Standard & Poor's 500 Index is down 3.6 percent since Monday. NPR's Jim Zarroli has been following the markets closely and joins us now. Hey, Jim.
JIM ZARROLI, BYLINE: Hi, Ailsa.
CHANG: So I thought the economy was doing well these days. Why isn't the stock market getting the message?
ZARROLI: Well, it has been doing well. We had 3.5 percent growth in the third quarter. Unemployment's low. But the thing is the stock market does not care about today. It cares about tomorrow. And there's this growing sense that things aren't as good as they seem and that, you know, growth is going to slow next year, which might not turn out to be true, but a lot of investors are starting to think that.
CHANG: OK. So we've been hearing about a possible trade deal between the U.S. and China and how that might be on shaky ground now. How much of concern is that trade deal to investors at this point?
ZARROLI: Well, it's a big concern. I mean, last week, it seemed like there was this detente in the trade dispute between the U.S. and China. President Trump said he was not going to raise tariffs again for 90 days so the U.S. and China could talk.
ZARROLI: He also said a lot of other things like China was going to lower its tariffs on cars, only, as the week went on, it seemed like China was describing the agreement somewhat differently. And then meanwhile, President Trump put out a tweet that said he was Mr. Tariff, which suggested he wasn't feeling all that conciliatory. So there was confusion about just what was agreed to. Here is Scott Anderson, who is chief economist at Bank of the West.
SCOTT ANDERSON: I think the market's hopes for a fairytale ending to the U.S.-China trade dispute is fading fast. It looks like this could be a protracted fight between the world's two largest economies that carries on into 2019 and beyond.
ZARROLI: And then this arrest of a senior executive at the Chinese company Huawei has really exacerbated tensions. It's an important company in China. It's the biggest telecommunications equipment company in the world - makes smartphones and equipment that connects to the Internet. The Chinese are not happy about this arrest, and having this kind of fight right now is not the kind of thing you want when you're trying to resolve a big trade fight.
CHANG: No. So the Dow had another steep drop on Tuesday, and you reported on something called the yield curve inversion. I'm afraid to ask this, but what is the yield curve inversion, and why is it spooking investors?
ZARROLI: Well, I will try to explain. Typically investors want more of a return when they lock their money away for long periods, which means that when the government sells something like a 10-year bond, it has to pay a higher interest rate than it would for a two- or a three-year bond. But on rare occasions, that can turn around, and people start demanding higher rates on short-term bonds because they're worried about where the economy is headed in the near term. And the problem with that is it can signal slowing growth or even a recession, and that gets investors in the bond market nervous.
CHANG: OK, one more quick thing before we let you go. OPEC met in Vienna today about oil prices, which have been falling pretty hard. Was there anything accomplished there?
ZARROLI: Nothing so far. Prices are falling because of this fear, again, about global growth slowing. OPEC's trying to agree on production cuts, which would stabilize prices they hope, but they have their own problems. One of the countries, Qatar, has quit OPEC. Russia, which isn't really an - is not in OPEC member but is supposed to attend the meeting anyway, hasn't weighed in yet, so they're meeting again tomorrow.
CHANG: OK, that's NPR's Jim Zarroli. Thanks, Jim.
ZARROLI: You're welcome. Transcript provided by NPR, Copyright NPR.