(Bloomberg) -- China’s stock market rebounded following a historic selloff on Monday, as a group of state-linked funds known as the national team scooped up assets and the central bank promised loans to help stabilize the market.

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The Hang Seng China Enterprises Index closed up 2.3%, giving investors a reprieve after it capped its worst day since the financial crisis. The onshore CSI 300 Index, which had dropped more than 7% the day before, ended 1.7% higher.

Officials and executives unveiled a series of moves to calm nerves. State-backed investors announced they were buying stocks and exchange-traded funds. Companies promised buybacks. Regulators loosened rules on insurers’ investments. The central bank eased its grip on the currency, and pledged more lending to help a sovereign fund load up on shares.

That was enough to address the slide, at least for now — but investors are bracing themselves for a prolonged period of tensions. After China retaliated against US tariffs by matching the increase in levies, Donald Trump threatened to impose another 50% tariff on China if it doesn’t back down. Beijing said Tuesday it would “fight until the end.”

“As far as US and China goes, we are well and truly into the game of chicken,” said Peter Kim, an investment strategist at KB Securities Co. “Trump has made his move and China has retaliated rather than choosing the path of compromise and it’s now up to which country is going to blink first. That’s very dangerous.”

The market stumbled during afternoon trading, after two influential bloggers posted a list of measures authorities are mulling to hit back at the latest tariff threats from Trump. Hong Kong’s Hang Seng Index, which had also been higher in the morning, briefly moved into negative territory before ending the day 1.5% higher.

National Team Support

Beijing’s attempt to address the market turmoil is a contrast to the response of officials in the US, where stocks have also been rocked by fears over a growing trade conflict behind the world’s two largest economies. While US President Donald Trump has largely shrugged off the market impact, Beijing has pulled out all the stops to ease the pain.

A basket of eight exchange-traded funds favored by China’s sovereign wealth fund, widely regarded as a proxy for the national team, saw a record inflow on Monday. These funds had a combined turnover of 105 billion yuan ($14.3 billion) on Tuesday, beating volumes from the previous session.