Yields on the benchmark 10-year Treasury note fell to their lowest levels since October 2016, and gold soared to a six-year high, while riskier assets like stocks and oil slid.

On Wall Street, the Dow Jones Industrial Average opened more than 500 points lower, helping erase gains in European shares, before ending the day close to where it started.

MSCI's gauge of stocks across the globe <.MIWD00000PUS> gained 0.16%.

"Bonds are being bought in a panic mode," said Andrew Brenner, managing director at National Alliance Capital Markets.

The Dow Jones Industrial Average fell 22.45 points, or 0.09%, to 26,007.07, the S&P 500 gained 2.21 points, or 0.08%, to 2,883.98 and the Nasdaq Composite added 29.56 points, or 0.38%, to 7,862.83. [.N]

The pan-European STOXX 600 index <.STOXX> rose 0.24%. [.EU]

There were few clear reasons for the afternoon rebound in U.S. stocks from their earlier lows.

"It's become a matter of buyers remaining interested in continuing to buy stocks that they feel have been oversold and a lack of sellers' supply," said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.

U.S. shares had gained overnight after President Donald Trump downplayed worries of a lengthy trade war and senior adviser Larry Kudlow said Trump's administration was planning to host a Chinese delegation for talks in September. Wall Street futures gauges also rose.

The U.S. administration's remarks marked a shift in tone from recent days, when Beijing warned that Washington's labeling China as a currency manipulator would have severe consequences for the global financial order. The U.S. move rattled financial markets and dimmed hopes the trade war was ending.

Since then, China's state banks have been active in the onshore yuan forwards market, tightening dollar supply and supporting the Chinese currency, sources told Reuters.

Despite that support, the yuan still dropped 0.2% to 7.0708 in offshore markets , with currency markets still on edge after the People's Bank of China (PBOC) set its official reference rate at an 11-year low..

The skittish mood was underlined by continuing demand for currencies and commodities considered safe havens.

Gold touched a six-year high of $1,489.76 per ounce. The Japanese yen rose 0.2% to 106.26 , although that was still some way from levels on Monday, when the trade war's escalation panicked investors.

The rush to the yen was also fueled by a 2% slump in the New Zealand dollar after its central bank made an aggressive interest rate cut and said negative rates were possible, promoting bets on further policy easing around the world.

Central banks, looking to rev up growth and fight low inflation rates, have turned increasingly dovish in recent months.

Benchmark 10-year notes last rose 7/32 in price to yield 1.7156%, from 1.739% late on Tuesday, after touching earlier lows. Wednesday's trough marked their lowest yield since 2016, as investors bet on another Federal Reserve rate cut in September.

Germany's 10-year bond yield fell to record lows deep in negative territory as the bigger-than-expected Kiwi interest rate cut and weak German economic data fueled the rally in bond markets.

In commodity markets, oil prices slipped to near seven-month lows, with the potential for damage to the global economy and dampened demand from the Sino-U.S. trade dispute casting a shadow over the market.

International benchmark Brent crude futures fell 2.5% to $57.44 a barrel, while U.S. crude dropped 2.5% to $52.31.

(Reporting by David Randall; Editing by Nick Zieminski, Dan Grebler and Jonathan Oatis)

By David Randall