Japanese and European stock markets rebounded on Tuesday after panic gripped financial markets on Monday, amid fears of a recession in the United States.
Stock market indices fell on Monday in all major financial markets around the world, starting with a sharp drop in Tokyo, while the New York Stock Exchange, which is a benchmark for all financial markets, closed sharply lower, with two of the three main indices experiencing their worst session in two years.
However, Deutsche Bank analysts reported a "change in direction on Tuesday" in financial markets.
Calm returns to markets after Friday's anxiety over a disappointing US jobs report.
Faced with a higher-than-expected unemployment rate and fewer jobs created than expected, markets feared that this could be an indication of a major economic slowdown in the United States as a result of the Federal Reserve's monetary policy.
The Federal Reserve raised key interest rates to their highest levels in 20 years in order to curb the US economy and reduce inflation to 2 percent after reaching 9.5 percent at an annual rate in June 2022, its highest level in 40 years.
With the first rate cut expected by investors, markets fear that the Fed has waited too long to act, risking causing a recession in the United States.
Deutsche Bank analysts said that the "change in direction" of the markets on Tuesday "appears to coincide with comments by Austin Goolsbee," the president of the Federal Reserve Bank of Chicago, who told CNBC the previous day that the jobs data "does not currently resemble a recession" and that the Federal Reserve "can wait for other data before the September meeting."
They also pointed out that activity in the US services sector returned to growth in July, according to an index released on Monday, considering that this data "may have also contributed to convincing markets that the jobs report is not as bad as they thought."
In Tokyo, the Nikkei, the main stock market index, rose 10.23 percent on Tuesday, a day after it had fallen 12.4 percent, its biggest points loss in history. In Europe, major financial markets rebounded after closing sharply lower the previous day.
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