Tuesday's initial sell-off started after stock markets dropped around the world, a domino effect from Wall Street's worst day in years. The S&P 500 closed down 3.8 percent, Dow Jones Industrial Average 4.2 percent and NASDAQ Composite 3.9 percent.
The yield on the United States 10-year Treasury bond touched a four-year high before falling back to 2.83 per cent.
USA stocks have tumbled anew in another trading session with big swings, as investors remain on edge after several days of volatile trading. The S&P 500 fell 101 points, or 3.8 percent, and the Nasdaq index fell 275 points, or 3.9 percent. At its lowest point on Tuesday, the Dow was off 10.7 per cent from its Jan 26 record.
Bond prices fell slightly.
US financial markets were bracing for another volatile day - and they got it.
The Dow Jones industrial average fell as much as 500 points in early trading, bringing the index down 10% from the record high it reached on January 26. "Whereas the US dollar, the Japanese Yen are more of the safe-haven areas where you see investors flocking from the riskier assets". Some also question the possible role of computer-driven algorithmic trading in the precipitous declines or even the ramifications of the rise and fall in the value of virtual currencies, notably bitcoin.
At one point it was down 1,600 points.
In Europe, the British FTSE 100 index fell 2.4 percent while the CAC 40 in France fell 2.8 percent and Germany's DAX was down 2.7 percent.
Stocks are opening higher on Wall Street as the stock market recovers some of the massive losses it has suffered over the past week.
Stephen Schwarzman, the chairman and CEO of financial firm Blackstone, warned recently of a potential "reckoning" in markets. As the Dow has gotten steadily higher over the last several decades, larger point drops translate into smaller percentage drops.
And it's now in a correction - 10% off its record high just two weeks ago. They were last trading at 2.76 on Wednesday.
Reasons for the erratic trading are unclear to analysts and investors but some have said possible causes could be worries about rising bond yields and higher inflation coupled with elevated valuations, algorithmic trading, and a complacent investor base. The VIX Volatility Index was lower at 27.73 for a loss of -2.25 points or -7.51%. "There's a fair amount of volatility in the market, and our belief is the volatility is leaving investors riddled with stress and uncertainty, which is likely to continue".
Gold was the only positive sector on the commodity-heavy index on Thursday, as more investors shifted toward the safe-haven asset. Switch was down 14 cents, or 0.90 percent to $14.83.
British markets closed Tuesday 1.5 percent lower, ending the day with the lowest close since December 7.