The Dow Jones industrial average suffered its biggest one-day point drop in history, plunging 1,175 points on Monday and giving back all its 2018 gains as a flash-crash-style drop intensified a free fall in stocks that began last week.
While Friday's market rout came amid US wage data on Friday that pointed to quickening inflation, which would lead to higher rates and, in turn, rising borrowing costs for companies, the selling Monday came amid few major data points.
World stocks clawed their way back from two-month lows on Wednesday, though momentum was weak and USA futures suggested Wall Street could lapse back into losses after rebounding from the biggest selloff in six years.
The Standard & Poor's 500 index rose 19 points, or 0.7 percent, to 2,714 as of 10:15 a.m.
Equity markets followed the lead set on Wall Street Tuesday with stocks in Europe and Asia seeing significant losses as sentiment turned sour.
"Volatility is back", said Jamie Cox of Harris Financial Group.
The benchmark S&P 500 fell 4.1 percent and the Dow 4.6 percent, suffering their biggest percentage drops since August 2011 as a long-awaited pullback from record highs deepened.
Bitcoin also declined sharply below $7,000 as the whole cryptocurrency market tumbled.
On Monday, the Dow plummet almost 1,600 points briefly in late trading, marking the worst intraday fall in market history.
The positive closing was seen as an admission the recent bloodbath was overdone - given the fundamentally strong U.S. economy.
"Corrections are a normal part of the investing process and not a reason to sell quality investments", said Alan Skrainka, chief investment officer at Cornerstone Wealth Management in Des Peres, Missouri.
Elsewhere, oil extended declines after US explorers raised the number of rigs drilling for crude to the most since August.
Costa told Xinhua that he did not think the sell-off would change the trajectory of the stocks market of the year.
This is due to inflation fears after strong United States jobs data at the end of last week that triggered a surge in bond yields and led to sell-off across U.S. stock markets.
You can check Best US Stocks to Buy Today for short term in 2018 during the current turmoil and trade accordingly. The euro was up 0.4 percent at $1.2415 while the dollar rose 0.1 percent to 109.22 yen. "It is clear that there will be more volatility going forward", said Salman Ahmed, chief investment strategist at Lombard Odier Investment Managers.
They included that many values were failing to reflect earnings and were inflated by post-crisis era stimulus cash - quantitative easing by central banks aimed at bolstering money supply.
Other Wall Street insiders say the worst is over.
The gains across the pond, however, did not spread to Asian markets, with the majority posting losses.
The budget deal "is providing a benefit to the market, but IRd be more focused on the discussion around wage growth than worrying about that", said Stephen Massocca, senior vice president at Wedbush Securities in San Francisco. They were last trading at 2.76 on Wednesday. But it's not apologizing for placing so much emphasis on the stock market's performance.
Investors were eyeing the recent steep slide as an opportunity, an extreme example of the "buying the dip" that has symbolized the market's steady climb to record highs.
The 10-year Treasury yield has receded in recent days and is trading around 2.77% on Wednesday.
The Hong Kong stocks closed down 1,649.80 points, or 5.12 percent, to 30,595.42 points. This will be creating opportunities for US companies, assuming the anti-trade banter is simply a negotiating point.