European markets opened higher on Tuesday with Germany’s DAX, France’s CAC 40 and London’s FTSE 100 all in the green after a massive sell-off on Monday.

Meanwhile, Japan’s benchmark Nikkei 225 index soared nearly 11%, a day after it set markets tumbling in Europe and on Wall Street. Other markets in Asia also rebounded, but more moderately, appearing to settle somewhat after the rollercoaster ride that started the week.

The scary Monday started with a plunge abroad reminiscent of 1987 ’s crash that swept around the world and pummeled Wall Street with more steep losses, as fears worsened about a slowing US economy.

The Nikkei gained nearly 11% early Tuesday and was trading 10.3% higher by early afternoon as investors bought into bargains after the 12.4% rout of the day before.

On Monday, the S&P 500 dropped 3% for its worst day in nearly two years, closing at 5,186.33. The Dow Jones Industrial Average reeled by 1,033 points, or 2.6%, to 38,703.27, while the Nasdaq composite slid 3.4% to 16,200.08 as Apple, Nvidia and other Big Tech companies that used to be the stars of the stock market continued to wilt.

The drops were the latest in a global sell-off that began last week, and it was the first chance for traders in Tokyo to react to Friday’s report showing US employers slowed their hiring last month by much more than economists expected. That was the latest piece of data on the US economy to come in weaker than expected, and it’s all raised fear the Federal Reserve has pressed the brakes on the US economy by too much for too long through high interest rates in hopes of stifling inflation.

A report Monday by the Institute for Supply Management said growth for US services businesses was a touch stronger than expected, led by the arts, entertainment and recreation sectors, along with accommodations and food services.

Professional investors cautioned that some technical factors could be amplifying the neck-snapping losses. South Korea’s Kospi index careened 8.8% lower, and bitcoin dropped below $54,000 on Monday from more than $61,000 on Friday. Even gold, which has a reputation for offering safety during tumultuous times, slipped about 1%.

On Tuesday, nearly all markets in Asia aside from Singapore saw gains. The Kospi jumped 4.3% to 2,546.64. Hong Kong’s Hang Seng index was up 0.5% at 16,775.65 And in Australia, the S&P/ASX 200 edged 0.3% higher, to 7,677.50.

Taiwan’s Taiex was up 1.2% after plunging 8.4% the day before. The Shanghai Composite index, largely bypassed by Monday’s drama, was up just over 1 point, at 2,861.87.

Slowing US economy fears

Monday’s meltdowns reflected fears that damage to the economy from prolonged high interest rates has been so severe that the Federal Reserve will have to cut rates in an emergency meeting, before its next scheduled decision on Sept. 18. The yield on the two-year Treasury, which closely tracks expectations for the Fed, briefly sank below 3.70% during the morning from 3.88% late Friday and from 5% in April. It later recovered and pulled back to 3.89%.

“The Fed could ride in on a white horse to save the day with a big rate cut, but the case for an inter-meeting cut seems flimsy,” said Brian Jacobsen, chief economist at Annex Wealth Management. “Those are usually reserved for emergencies, like COVID, and an unemployment rate of 4.3% doesn’t really seem like an emergency.”

The US economy is still growing so a recession is far from certain. The US stock market is still up a healthy amount for the year, with double-digit percentage gains for the S&P 500, the Dow and the Nasdaq Composite.

Some of Wall Street’s recent declines may simply be air coming out of a stock market that romped to dozens of all-time highs this year, in part on a frenzy around artificial-intelligence technology. Critics have been saying for a while that the stock market looked expensive after prices rose faster than corporate profits.

Expectations for earnings are still high, with growth for S&P 500 profits this past quarter looking to be the strongest since 2021.

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Upcoming US elections could further scramble things: apart from the potential impact of policies that follow the vote, market gyrations could affect the election itself.

A recession would likely to put Vice President Kamala Harris on the defensive, but slower growth would sap inflation. That would oblige former President Donald Trump to focus on ways to revive the economy instead of focusing on higher prices.

Other factors that drove Monday’s plunge

The Bank of Japan’s move last week to raise its main interest rate from nearly zero last week was another factor driving Monday’s plunge in Tokyo. Higher rates can boost the value of the Japanese yen, but oblige traders to scramble out of deals where they had borrowed money for virtually no cost in Japan and invested it elsewhere around the world.

On Tuesday, the dollar was worth 145.33 yen, up from 144.17 yen late Monday.

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Surging prices for shares in Big Tech companies, like Apple, Nvidia and others known as the “Magnificent Seven ” faltered last month on worries prices had overshot expectations for their future growth. Underwhelming profits from Tesla and Alphabet added to the pessimism.

Apple fell 4.8% Monday after Warren Buffett’s Berkshire Hathaway disclosed that it had slashed its ownership stake in the iPhone maker.

Nvidia, the chip company that’s become the poster child of Wall Street’s AI bonanza, fell 6.4%. Analysts cut their profit forecasts for the company after a report from The Information said Nvidia’s new AI chip is delayed. Recent selling has trimmed Nvidia’s gain for the year to nearly 103% from 170% in the middle of June.

Alphabet, fell 4.4% after a U.S. judge ruled Google’s search engine has been illegally exploiting its dominance to quash competition and stifle innovation.

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Other worries also are weighing on the market. The Israel-Hamas war and other global hotspots could cause sharp swings for the price of oil.

Early Tuesday, US benchmark crude oil was up $1.18 at $74.12 per barrel and Brent crude, the international standard, advanced $1.00 to $77.30 per barrel.

The euro rose to $1.0956 from $1.0954.