World stock markets were a mixed bag on Wednesday as some investors fished for bargains and others gave in to anxiety over simmering trade tensions between China and the United States.

London and Frankfurt edged higher, mirroring earlier gains in Asia, while Paris was down at the European close.

Wall Street stocks were also mixed, with the Nasdaq jumping to a fresh record close and the Dow dipping.

Large tech companies such as Facebook and Microsoft scored solid gains, while Twenty-First Century Fox surged 7.5 percent after Disney lifted its bid for key assets of the media giant in the latest move in a burgeoning bidding war with Comcast.

Analysts said many market players could not get themselves to believe that US President Donald Trump would take the world into an all-out trade battle.

“The trade tensions will fade somewhat in coming months either because Trump finally strikes some trade deals with China and possibly even with the big EU or because markets and businesses get used to the noise,” said Holger Schmieding at Berenberg.

“On balance, we remain cautiously optimistic that Trump will either go for deals or at least not escalate tensions further and further throughout the summer,” he said.

But analysts also warned that fresh retaliatory moves could trigger another markets dive.

“Global equity bears (sellers) could transform the current rebound into a classical dead cat bounce if trade tensions between the United States and China continue to escalate,” predicted Lukman Otunuga, at FXTM.

European Trade Commissioner Cecilia Malmstrom said retaliatory tariffs against US goods such as blue jeans and motorcycles would go into effect Friday in response to US tariffs on imported aluminum and steel.

“We did not want to be in this position. However, the unilateral and unjustified decision of the US to impose steel and aluminum tariffs on the EU means that we are left with no other choice,” Malmstrom said in a statement on Wednesday.

US Commerce Secretary Wilbur Ross was grilled by US Senators over Trump’s trade policies, with Republicans such as Utah’s Orrin Hatch and Iowa’s Chuck Grassley balking at the risk to US industries and consumers.

“You are putting American jobs at risk, and you are destroying markets, both foreign and domestic, for American businesses of all types, sorts and sizes,” Hatch said.

Ross countered that in Trump’s view, the United States was already the loser in a long-standing trade war and was only now beginning to fight back.

OPEC focus
Eyes are turning to OPEC’s crucial meeting as Saudi Arabia pushes, along with non-member Russia, to ease an output ceiling that has supported oil prices for 18 months.

The two major producers are facing stiff opposition at the June 22-23 gathering from nations that have benefited from the resulting higher revenues.

Saudi Arabia’s energy minister Khalid al-Falih said he was convinced OPEC members would “do the right thing” and agree to ease an oil production cap this week despite strong resistance from arch foe Iran.