The French news agency reported that "Japanese and European stock markets recorded a rebound today after panic gripped financial markets on Monday amid fears of a recession in the United States." Stock indices plummeted on Monday across all major financial markets worldwide, starting with a sharp decline in Tokyo, while the New York Stock Exchange, a benchmark for all financial markets, closed strongly lower, with two of the three main indices experiencing their worst session in two years. However, analysts at Deutsche Bank noted a "change in direction occurring on Tuesday" in the financial markets.
Calm is returning to the markets following the anxiety triggered on Friday by a disappointing U.S. jobs report. With a higher unemployment rate than expected and a number of newly created jobs falling short of anticipated figures, markets were concerned that this might indicate a significant economic slowdown in the United States due to the monetary policy adopted by the Federal Reserve.
The Federal Reserve raised its key interest rates to their highest levels in two decades in order to curb the U.S. economy and reduce inflation to 2%, after it hit 9.5% annually in June 2022, the highest level in forty years. As investors anticipate the first interest rate cut, markets fear that the Federal Reserve may have waited too long to act, risking an economic recession in the United States.
