Jonathan Loynes, chief economist at Capital Economics, wrote in a note that the recent movements in the equity markets have "reversed only a fraction of the gains" in the past two years, and that it is possible that "market sentiments will improve again in the coming days".
Two days of steep losses erased the USA market's gains from the start of this year, ending a spate of record-setting calm for stocks with a pullback that market pros have been predicting for some time. The U.K.'s FTSE 100 Index tumbled by 2.6 percent, while the French CAC 40 Index and the German DAX Index slumped by 2.4 percent and 2.3 percent, respectively.
The losses seeped through to Asia this week.
"If you look back over the last year, the Dow is still, after all of this, is still up nearly 20 percent in the last year", said Jarvis.
While most analysts believed this week's distressed selling looks to have run its course for the moment, allowing volatility to abate a little, the prospect of monetary tightening across the globe remains a challenge for the long term.
The dollar was boosted by the jobs figures and on Monday managed to hold on to the gains it made against the yen, pound and euro.
Investors also dumped junk bonds, with the yield of Merrill Lynch US high yield index rising to 6.017 percent from 5.964 per cent at the end of last week.
As a result, he reckons buyers are being caught out: "So far every time dip buyers come in they are being blown away - despite the fact that on a forward earnings basis stocks are looking more and more appealing".
The Dow, which tracks 30 major USA companies, has fallen more than 1,000 points over two days of trading. Both Democratic liberals and GOP tea party forces were fighting the plan, raising questions about its chances just a day before the latest government shutdown deadline.
The Standard & Poor's 500, the benchmark for many index funds, fell 113 points, or 4.1 percent, to 2,648.
The benchmark Nikkei 225 index lost 4.16 percent or 943.70 points to 21,738.38 in early trade while the broader Topix index was down 3.94 percent or 71.94 points at 1,751.80. Australia's S&P/ASX 200 added 0.2 percent to 5,890.70. This helped to fuel a bubble in the stock markets, which may or may not have popped now.
In the Middle East, stocks were touched by the USA and Asian markets' sell-off, though the losses were more limited. Last week's data from the States showed evidence of inflation creeping into the landscape but in an acceptable manner. Wynn has denied the accusations but said he was stepping down because they prevented him from filling his corporate positions effectively.
The dollar was changing hands at ¥109.43 today against ¥109.57 in NY. The contract dropped $1.60 on Wednesday.
Oil prices also dropped, with global benchmark Brent futures hitting a one-month low. It sank $1.35 in the previous session.