The stock market appeared to find a silver lining as it opened with improved numbers, marking a positive shift from the previous day's global downturn, which CBS News attributed to recession fears. This prompted calls for the Federal Reserve Board to consider cutting interest rates.
Tokyo, which had suffered significantly during Monday's sell-off, led the recovery with a more than 10% surge Tuesday.
London also rebounded, regaining the 2% it had lost on Monday. Similarly, Paris and Frankfurt saw comparable gains, according to CBS News.
Bloomberg reported that U.S. futures were also trending upwards.
By 10 a.m. ET, the Dow Jones had risen by 0.83%, the NASDAQ was up by 0.43%, and the S&P 500 had gained 0.84%, as noted by Market Watch.
Despite these improvements, analysts remained cautious about potential volatility.
The earlier sell-off was influenced by data indicating fewer U.S. jobs were created and a weak manufacturing sector. This situation raised concerns that the Federal Reserve's prolonged high interest rates could pose a risk of a potential recession.
The "Sahm Rule," used to determine if an economy is entering a recession, is often referenced in such cases. According to this rule, if the moving average of unemployment is 0.5 percentage points higher than its lowest level over the past 12 months for three consecutive months, an early recession might be imminent.
Tokyo's Nikkei, which had fallen by 12% Monday, rebounded with a 10.2% increase Tuesday. Major Japanese companies like Toyota, Sony and Tokyo Electron also experienced significant gains.
"This is a sweeping, across-the-board gain," commented analysts at Nomura.
