By David Goldman and Nathaniel Meyersohn, CNN Business

(CNN) -- Stock market volatility works in both directions. A day after gaining more than 1,000 points, the Dow fell 500 points Thursday. The S&P 500 fell 2.1% and the Nasdaq was down 2.2%. The Nasdaq fell back into bear market territory.

Wednesday's super-sized gain was a much-needed breather for a market that is having its worst December since the Great Depression. The Dow had its best point gain ever, and the S&P 500 and Nasdaq posted their best performances since March 2009.

But one day is not a trend. Anyone watching stocks this month knows that sentiment can turn on a dime — the Dow was up nearly 400 points Friday before closing more than 400 points in the red. Jittery investors trying to read the tea leaves have seen bad omens practically everywhere over the past few weeks — even good news has rattled the markets at times.

The Dow has either gained or lost more than 350 points in seven of the past eight trading sessions. Thursday would make eight of nine. Those huge gains and (mostly) losses suggest investors remain on edge about the economy, monetary policy, trade and Washington dysfunction. December has been a very rough time for investors.

"Human nature is very consistent — pain is the ultimate motivator for change, and a 20% market swoon in under three months has most tactical and historical indicators suggesting extreme pain," market analysts at Canaccord Genuity wrote.

The firm said investors should expect more volatility and attributed the unease to "chaos in Washington," as well as the Federal Reserve's decision to stick to plans for gradual interest rate increases despite the recent stock turmoil. President Donald Trump, after ripping up trade policies aimed at stitching global economies together, has further unsettled markets by signaling he wanted to fire Federal Reserve Chairman Jerome Powell. Trump appointed to his post last year but has since turned on him for raising rates.

Stocks do a reversal, global stocks caught in the tumult

On Thursday, some of the market's big winners the prior day lost ground.

Tech, which led yesterday's rally, dived this morning. Amazon (AMZN), Facebook (FB), Alphabet (GOOGL), Netflix (NFLX) and Apple (AAPL) all fell about 2%.

GE (GE) had its fifth-best day of the year Wednesday but fell 3.6% Thursday.

Oil, which rose 9% a day ago, was down 1.5% Thursday.

European markets fell sharply on their first day of trading since Monday. The FTSE was down 1.6% and Germany's DAX fell 2.7%.

The Hang Seng in Hong Kong and the Shanghai Composite both shed more than 0.6% after weak Chinese industrial data highlighted the difficulties facing the world's second largest economy.

But Japan's Nikkei jumped nearly 4% on Thursday, pulling the index out of the bear market it had entered just two days ago. Stocks also climbed more than 1% in Australia and Singapore.

"The market was pressured by worries over Washington, the Fed and the threat of the trade war sparking a global recession," said Sam Stovall, chief investment strategist at CFRA Research.

Stocks were also pressured Thursday by a pullback in the monthly consumer confidence tracker. Confidence is still strong, but the report indicates that the government shutdown, volatile stock market and trade jitters are affecting consumers.

"If the consumer gets cold feet, then one of the economy's major engines may fail to keep the economy flying high," said Chris Rupkey, chief financial economist at MUFG Union Bank.