Wall Street bounces back, but FTSE 100 suffers biggest fall since Brexit vote - as it happened
The Dow Jones has surged by 567 points as the US stock market roared back from its slump on Monday, but European stocks had a bad day
- Full story: Stocks tumble as concerns grow over febrile global markets
- Explainer: Five factors behind the global plunge
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10.36pm GMT
Time for a recap, after another hectic day in the markets.
The US stock market has roared back from its slump on Monday, in a highly volatile trading session. After initially sliding, the Dow Jones industrial average ended the day with its biggest jump in over a year - up 567 points.
Related: Stocks tumble as concerns grow over febrile global markets
10.13pm GMT
What a difference a day makes. Traders on the floor of the New York stock exchange are grinning and sharing high fives, after seeing shares recover this afternoon.
9.50pm GMT
Sarah Sanders, the White House press secretary, has commented on the US stock markets - and insisted that America's economy is robust.
"Look, the economy is incredibly strong right now. The president's focus right now continues to be on the long term economic fundamentals which, like I just said, are very strong in this country. We're infinitely better off today than we were before the president took office, particularly on the economy. We have historically low unemployment and we actually have increasing wages for American workers.
There's nothing that's taken place over the last couple of days in our economy that's fundamentally different than it was two weeks ago and we're very comfortable with where we are right now."
"Does the president have second thoughts about taking credit for a booming economy? Absolutely not."
9.41pm GMT
Today's rally is the S&P 500's best one-day gain, in percentage terms, since November 2016.
Quite a recovery, given it had its worst day in six years yesterday.
9.30pm GMT
Here's Reuters' closing market report:
U.S. stocks posted sharp gains in another wild trading session on Tuesday, as indexes rebounded from the biggest one-day drops for the S&P 500 and the Dow in more than six years that stalled the market's record run.
9.17pm GMT
The Dow's revival was led by chemicals firm Dow DuPont, retail chain Home Depot, tech giant Apple and oil producer Chevron, which all gained at least 4%.
At the end of a wild session, the #Dow is more than 2% higher, led by a rebound in "quality names." Yields on 10-year #bonds have retraced to 2.79%.
Behind the headline numbers: Crowded short #volatility positioning - in its many forms - getting flushed out.#markets #investors
9.08pm GMT
BREAKING: The US stock market has bounced from its worst day in six years.
BREAKING: Dow Jones industrial average closes up more than 560 points, or 2 percent, after another volatile day.
8.57pm GMT
With just a few minutes trading left, Wall Street has managed to recover its poise. The Dow and the Nasdaq are both up over 2%.
8.53pm GMT
Fact of the day....
We've had a few 1,000-point ranges, but today would be the first time the Dow has been both up and down more than 500 points in the same session.
Thanks @HumOnTheMarkets
8.48pm GMT
John Lynch, chief investment strategist at LPL Financial of North Carolina sums up the day:
"It's been a crazy period and today the market is probably just trying to find some footing."
8.45pm GMT
In a stark contrast to yesterday's wobbles, the Dow just surged by 600 points -- suggesting we could recover half of Monday's losses...
#Dow +600 points
8.33pm GMT
Can the Dow hang on?
With 30 minutes to go, the US stock market is up... but not so strongly that a late slump can be ruled out.
8.32pm GMT
Here's our colleague Philip Inman on today's market action:
Shares in London plunged for a sixth day and by the largest amount since the Brexit vote, as concerns grew that febrile global stock markets, which have lost $4tn (2.9tn) in value since Friday, were in the grip of panic-selling.
The FTSE 100 slumped 2.6% to 7,141 to wipe all the gains from this year's trading and set the index of Britain's most valuable companies on course for a second week of losses. Investors took fright elsewhere in Europe, with markets in Germany, France and Spain all closing down by more than 2%.
Related: Stocks tumble as concerns grow over febrile global markets
8.28pm GMT
One reason the Australian market is set to bounce back is that another record half-yearly profit is expected from Commonwealth Bank, the country's biggest company.
It is forecast by analysts to announce six-month earnings of about A$5.2 billion - up 6% - despite its regulatory woes.
8.26pm GMT
So, after shedding a record 1,175 points last night, the Dow is on track to recover a significant chunk of them......
Relevant to yesterdays thing about Dow declines in points vs % - right now, at +480, we're on track for the 11th biggest single-day *increase* in the Dow, ever.
8.16pm GMT
The S&P 500 is also putting on a late spurt.
S&P 500 gains 1.6% to hit a session high https://t.co/T4KvFMu1hN pic.twitter.com/p71IxoUgRc
8.10pm GMT
The Dow is continuing to rise in late trading - now up 504 points, or over 2%, at 24,850.
8.07pm GMT
There are signs that Asia-Pacific markets will rally on Wednesday.
Australia's ASX200 benchmark has lost A$85bn in value in two days but is set to bounce back on Wednesday, according to futures trading.
8.01pm GMT
The rally is back on again!
As Wall Street enters its final hour of trading, the Dow Jones industrial average is making a late charge.
7.42pm GMT
A lot of experts have argued today that the current selloff is just a much-needed correction, not the start of a crash.
But our financial editor, Nils Pratley, isn't convinced by this breezy optimism. Instead, he highlights several reasons to be worried. For example:
The past couple of days have shown one thing - that there was an awful lot of money betting on tranquillity via various financial products manufactured by investment banks. Did a wipeout of some of these low-volatility funds feed the selling pressures on Monday? Almost certainly. But is that "technical" factor a temporary sideshow that can be ignored? Not necessarily. It may be evidence that other risks have been packaged up and sold as "low risk" when they're actually the reverse. When investors are fed cheap money for a decade, dumb bets can be made.
Plus, the prelude to the drama was a rapid rise in the yield on 10-year US treasuries from 2.4% to 2.8%. This, we are told, happened because the strong news on jobs and wages means the US Federal Reserve will have to raise interest rates three times this year. That explanation is entirely plausible. But a 10-year yield of 2.8% is still low by historical standards. What would something more normal - say, 4% - do? If the deflation dragon really has been slain and the Trump administration is dishing out tax cuts, isn't 4% a possibility? On the evidence of the past week, the stock market may not adjust easily.
Related: Groupthink about Monday's 'correction' is slightly alarming | Nils Pratley
7.34pm GMT
Wall Street continues to see-saw, and with 90 minutes trading left the main indices are in the red.
The S&P 500 has shed 0.5% (on top of Monday's 4.1% fall), while the Dow remains pretty volatile - currently down 0.2%.
I still think this is a continued reaction to the very rapid rise in interest rates and inflation expectations over a short period of time.
We are just seeing some continued selling after a very long period of a complacent environment."
7.24pm GMT
Some of the world's richest people are a little less rich today, thanks to yesterday's market mayhem.
Bloomberg has calculated that Warren Buffett, the veteran investor, lost $5.1bn on Monday. But that won't stop him buying a can of his favourite cherry coke, as the Sage of Omaha is still worth $85bn.
7.21pm GMT
Update: Dow now down 85 points.
With about two and half hours trading left, the Dow is down 0.4% on the day,down 6.9% on the week, 4% on the month. And up 21% on the year.
7.07pm GMT
Back in London, traders are counting the damage after the FTSE 100 suffered its biggest one-day fall since the Brexit vote.
Financial stocks had a bad day, with Standard Life and Schroders down over 5%.
50bn wiped off the FTSE 100 as global markets hit by more turmoil https://t.co/JZeqruoIhp
6.52pm GMT
After Monday's wild drama, and today's losses in Asia and Europe, shares are finally looking calmer.
The Dow is now bobbing around its opening levels, as traders take a breather and try to anticipate the market's next move.
Bet it'll be an interesting last hour
6.36pm GMT
And.... the Dow has turned negative again <drink!>, down 35 points.
Travelers Companies, the insurance group, is currently the biggest faller, down 2.6%. Oil giant Exxonis down 2.5%, followed by pharma group Merck (-2.15%) and Coca-Cola (-1.85%)
6.24pm GMT
6.22pm GMT
Having been up, and down, and up, and down, the Dow Jones is currently 100 points higher today (+0.4) at 24,446.
But trading remains jittery, so do not try this at home (or in the office!):
New drinking game: A shot for every time the Dow changes direction today.
I'd be drunk by now.
6.03pm GMT
Here's investor and businessman Carl Icahn on the markets, courtesy CNBC:
Carl Icahn to CNBC: Think market will bounce back, but "one day this thing is just going to implode" https://t.co/YKho1O67Ek pic.twitter.com/bYSicU1F0x
Icahn on the markets: "Eventually there's a major problem coming -- a major storm, a major earthquake -- coming. But could be 5 years, 5 months, I don't know." https://t.co/ztPpiiil3P pic.twitter.com/yLH2XHSX9H
5.42pm GMT
IMF chief economist Maurice Obstfeld has added his voice to those saying the economic fundamentals are strong despite the current market turmoil.
5.32pm GMT
If Wall Street seems incapable of deciding which direction to stick with, there was no such hesitation in Europe. With the global concerns about rising interest rates and a spate of catching up with Monday's slump in the Dow, European markets have suffered deep declines. The final scores showed:
5.24pm GMT
The VIX hit 50 then dropped to 24. Now at 37. A volatility index that's very volatile pic.twitter.com/dKi1pySTNV
5.16pm GMT
The sell-off in stock markets does not relate to economic fundamentals, agrees City Index market analyst Fiona Cincotta:
Whipsaw action is sending equity indices on a wild ride on Tuesday. As the bulls battle the bears US stocks have opened trading a wide range. The Dow had moved through 934 points early on as investors were keen to pick up bargains but fear that it is still too early to call the bottom....
The CBOE volatility Index, also known as the VIX, or fear gauge remains at elevated levels on Tuesday spiking to 50 before retracing back to 40, an increase of 7% on the day. Stepping back from the trading ranges and looking at the levels that Wall Street is trading at and suddenly it is possible to gain some perspective on the numbers. The Dow is at 24,423 (now up on the day) trading at a level that was last seen just two months ago.
5.06pm GMT
Here, from our colleagues in New York, is a quick run through some of the reasons for the current stock market uncertainty:
Related: Low interest rates, rising wages and more: five reasons for the market plunge
4.59pm GMT
The stock market falls should have little impact on the overall global economy, say Capital Economics. Its chief global economist Andrew Kenningham said:
The slump in equity markets would have to go a lot further to cause economic growth to slow significantly. That may yet happen, but for now prospects for global growth still look fairly bright.
The fall in global equity prices over the past few days has been unusually sudden, but it is not yet exceptionally large. The MSCI World equity index has fallen by 6% from its peak last week. As a comparison, there have been four instances of double-digit percentage falls in the index since the financial crisis. These occurred in 2010 (-15%), 2011 (-20%), 2012 (-13%) and 2015/16 (-17%).
4.43pm GMT
The FTSE 100 has dropped by 2.64% or 193 points to its lowest level since last April.
This is the biggest percentage drop since the day after the UK referendum on Europe, and marks the sixth successive trading day of declines.
4.27pm GMT
The Dow's uncertainty continues, and it is now down 141 points. David Madden, market analyst at CMC Markets UK, says:
The Dow Jones and S&P 500 started the day very much offside, and then managed to drive into positive territory only to slip back again.... Traders don't know which way to turn as uncertainty is running high. The colossal range on the US indices sum up how irrational equity traders are at the moment, and while some go bargain hunting, others are fearful we could see another leg lower.
4.17pm GMT
The current market sell off is just a correction, said Treasury secretary Steven Mnuchin, but he also told senators that algorithmic trading had an impact.
He told the House Financial Services Committee that markets were functioning very well, although the administration was monitoring the situation.
4.00pm GMT
Here's a graph showing the volatility in the Dow Jones Industrial Average so far today:
3.25pm GMT
It's been a chaotic start on Wall Street, says Spreadex financial analyst Connor Campbell.
And with the Dow Jones Industrial Average now down 170 points, it is hard to disagree. Campbell says:
The Dow was all over the place after the bell. With the futures promising the index was going to spill its guts, it was a welcome relief that the index instead quickly shifted into the green. The index is still pretty damn volatile, however.... It's also worth noting that the Dow did something similar yesterday, ducking an immediate bloodbath only to completely lose its bottle by the end of the session.
3.21pm GMT
Elsewhere, the Vix volatility index has fallen back sharply (ironic, given how volatile the Dow is at the moment).
After hitting a level of 50 earlier, the Vix is now down 33% on the day at 24.7.
3.17pm GMT
The Dow is all over the place. After the initial 550 point fall and the subsequent 350 point rise, the Dow is now up just 50 points or so. What it will close at is anyone's guess, but the recent falls do seem to have attracted some buyers. Neil Wilson, senior market analyst at ETX Capital, said:
The valuations were certainly looking attractive on a forward earnings basis, providing attract entry points for a number of stocks. Some deep-pocketed funds may have stepped in to hoover up what they could - in this context it looks for the time being like the correction was exactly what the market needed - although we have a long way to go today still and sentiment is still fragile after two bruising sessions.
3.12pm GMT
The White House, and specifically the recent tax cuts, have played a part in the current market volatility, says Royal London Asset Management:
US stock market volatility continues to spike higher as the strongest wage inflation in the US since 2009 triggered fears of faster than expected rises in interest rates. While Donald Trump's White House has correctly pointed to strong economic fundamentals as a more important long term story and the role of the tax cuts in driving this, they've failed to appreciate the impact that their policies could have on inflation, and therefore the path of interest rates.
Investors welcomed the announcements of tax cuts but are starting to get second thoughts as the consequences of adding stimulus late in the business cycle become clear. Unemployment is low and the potential for strong wage inflation once US tax cuts take effect has spooked markets, given what this means for US interest rate policy.
Although rising interest rates pose a challenge to the stock market, this will only become a serious one once they are high enough to cause the economy to roll over. With the Fed Funds rate still below the level of core inflation in the US, that could take quite a while.
2.59pm GMT
The early recovery in US markets gives some credence to those who believe the recent falls were a much needed market correction rather than the precursor to a wider sell-off. One of those is Sven Balzer, head of investment strategy at Coutts:
This week's stock market falls show a much needed market correction after a long period of strong performance, and little more. Global economic growth remains strong and there are no signs of a US recession, which usually heralds a wider sell-off...
In our view, this is a short-term correction driven by technical factors rather than concerns about the underlying economic picture or corporate health. While this can be unnerving for investors, we see a robust economic and corporate environment that should continue to support equities.
2.56pm GMT
Go Wall Street!
Instead of sinking into the mire, the Dow is now up 350 points, or 1.4%. That means leading shares have recovered around a third of Monday's tumble.
last one pic.twitter.com/cTdRnCrOpE
2.45pm GMT
Wall Street is fighting back! After Monday's wild swings, the Dow has clawed back its opening falls - and is now up 0.13%.
That doesn't make much of a dent in yesterday's rout, but investors will be relieved that it's not worse. Still early days though!
Dow now up on the day pic.twitter.com/r74dXGahyS
2.42pm GMT
After a rocky start, the tech-heavy Nasdaq index has turned positive.
2.38pm GMT
Things are settling down on Wall Street.
After six minutes trading, the Dow is now down 157 points -- perhaps traders are resisting the temptation to sell everything.
2.34pm GMT
DING DING goes the opening bell of Wall Street, triggering another wave of selling.
The Dow Jones industrial average has swiftly shed 547 points, a fall of 2.25%, on top of Monday's 1,175 slide.
The Dow BRIEFLY hit a 10% correction before pulling back...
Are cooler heads prevailing?#stocks
#BREAKING Dow Jones Industrial Average opens more than 500 points lower#StockMarket pic.twitter.com/AdpcKoH6I7
2.23pm GMT
Right. Deep breath time. After its biggest sell-off in six years, Wall Street is about to reopen.
The futures market is still jittery, as traders try to anticipate the market's next move.
US markets - DOW futures currently down 450 points courtesy of CORE SPREADS
2.21pm GMT
Veteran City analyst George Magnus has a deeply worrying take. He thinks markets are wobbling because the US government's budget deficit is likely to spike over the next couple of years.
That's because the new Tax Cut and Jobs Act will force Washington to borrow much more to balance its books -- at a time when the economy should be strong (so borrowing should be low).
Trillion dollar deficits are just over the horizon, which will cause US government debt as a share of GDP to rise in the next several years to over 100 per cent. While debt levels alone cannot predict what will happen to bond yields, the markets fear that significant unfunded government borrowing-especially when the economy is doing well-will cause the Federal Reserve to carry on raising interest rates, in turn pushing bond yields higher.
On current trends, this cyclical shift will eventually, maybe in 2019, puncture the stock market, corporate profits, and most likely the economy.
Behind the stock market fall, there is a bigger story of Republican fiscal irresponsibility writes @georgemagnus1 https://t.co/Z1Z0oFGrfQ
2.09pm GMT
With 20 minutes until the Wall Street open, a chunky sell-off still looks likely....
The Dow is set to tumble another 600 points at the open https://t.co/4KFwfxv62J pic.twitter.com/rk5CNH2RqX
2.07pm GMT
Bears are running rampant through the global markets today, following Monday's rout on Wall Street, says Lukman Otunuga, Research Analyst at FXTM.
He questions whether the recent losses are merely a 'healthy correction', as some investors claim.
A sense of anxiety amongst investors over central banks raising interest rates faster than expected, remains one of the likely culprits behind the global sell-off. In Asia, equities were a sea of red during early trade and the negative domino effect has already punished European markets.
With Wall Street suffering its largest one-day decline in more than six years on Monday, US stocks could remain depressed this afternoon.
1.39pm GMT
Take a deep breath, stock market traders. The opening of Wall Street is 50 minutes away, and heavy falls look likely:
Dow Futures down 313 points, pointing to nearly 700 point drop at the open pic.twitter.com/sseGLPidiJ
1.38pm GMT
Guy Foster, head of research at wealth manager Brewin Dolphin, says the financial markets are adjusting to a new world where central bankers aren't propping assets up through loose monetary policy.
He writes:
Interest rates are rising at a time when the economy needs money for the increased corporate investment activity which is taking place. That means there won't be the constant flow of money into the equity market which has been supporting prices over the last couple of years.
As I said before the year ended, the real challenge for investors after an environment of very low volatility is that they may be unnerved as it "normalises". More volatility means more opportunity for active investors with strong nerves. We see the recent sell off as validating rather than challenging that assessment"
1.37pm GMT
Newsflash: America's trade deficit has widened to its highest level since the financial crisis.
New figures from the Commerce Department show that the US imported $53.1bn more than it exported in December 2017, an increase of 5.3%. That's the biggest monthly deficit since 2008.
#BREAKING US trade gap spiked 12% in 2017 on record imports: Commerce Dept.
1.02pm GMT
Traders on Wall Street are expecting fresh losses when the market opens in around 90 minutes time.
"The one thing I could say with confidence is that volatility has suddenly come back into the market.
"The declines in markets are steep and vicious and are fostering a feeling of fear which begets irrational behavior. So this market is now driven on fear of rates and [rising] wages. That basically means good news now is bad news.
12.52pm GMT
The turmoil in the markets today has disrupted Greece's plans to issue a new government bond.
Barely 24 hours after the mandate was announced, it was decided not to push ahead with what would have been the debt-stricken country's boldest market foray in almost eight years under international bailout programmes.
It was assumed the seven-year issue would price today but one lead manager said: "we felt it would be prudent to wait for some stability. Greece doesn't do deals very often and wants to make sure it works."
12.44pm GMT
It's shaping up for a rough opening on Wall Street.....
Stock futures point to Dow drop of about 550 points at the open, S&P drop of nearly 50 points and Nasdaq drop of 85 points https://t.co/ErtDja9VdQ pic.twitter.com/kO178liK1L
12.38pm GMT
Our economics editor, Larry Elliott, says we're looking at a stock market correction - not a crash.
He argues that America's new top central banker, Jerome Powell, won't stay on the sidelines for long. If the selloff continues, surely Powell's Federal Reserve will wind back the tightening of monetary policy (the equivalent of pouring a bit more gin into the punch bowl).
Trump has a lot riding on the stock market continuing to rise and certainly did not choose Jerome Powell to be the chairman of the Fed because he thought his appointee was an interest-rate hawk.
The falls on Wall Street were triggered by last week's labour market report, which showed unemployment at 4.1% and a pick-up in average hourly earnings. But Powell would not have to look all that hard to find reasons for a gradual, market-pleasing, rise in interest rates rather than an aggressive tightening. If the current turmoil continues, Powell will no doubt seek to reassure the markets.
Related: Stock market fall looks like a correction, not a crash | Larry Elliott
12.34pm GMT
Every share on the FTSE 100 index is now down, as traders hunker down ahead of the Wall Street open in two hours time...
12.26pm GMT
James Andrews, head of investment management at City firm Redmayne Bentley, reckons that the global selloff will abate soon.
He argues that investors have over-reacted to last week's jump in US wages (which arguably makes rising inflation and higher interest rates more likely).
"This isn't to say the volatility can't continue, as we have had a phase of very low volatility and some profit taking is natural following a prolonged period of exceptional returns.
However, given the positive fundamentals around the globe currently, it feels like any market pull-back should be relatively short in nature at this time until we see a material change in global interest rates, and therefore the return on cash and less risky assets, not to mention a less favourable outlook for companies globally."
12.15pm GMT
Here's Reuters latest market update:
World stock markets nosedived for a fourth day running on Tuesday, having seen $4 trillion wiped off from what just eight days ago had been record high values.
Europe's main bourses were down around 2 percent, leaving investors with little option but to seek traditional refuges such as gold and one of the initial triggers for the selloff - benchmark government bonds.
12.07pm GMT
European stock markets are heading lower as lunchtime approaches, as investors fear another day of losses on Wall Street.
Britain's FTSE 100 is now down 180 points, or 2.5%, heading close to this morning's one-year low.
Futures have been all over the place this morning but seem to be settling lower, ready to push through another run of levels on the downside.
11.57am GMT
It's been a rough day for traders around the globe, as today's correction has gathered pace.
11.44am GMT
Oh dear. Investors who had bet on low market volatility by putting money into that XIV security have been discussing their losses on Reddit.
One claims to have lost $4m, due to the surge in volatility yesterday, while other small traders are nursing smaller, but painful, losses.
Really begs the question of who was buying. $XIV markets itself as a tool for 'sophisticated investors' but there's *a lot* of naive retail interest...
Some sad stories starting to emerge. pic.twitter.com/Byyt2VgMMt
11.41am GMT
The Dow Jones futures price has been flailing around since Wall Street closed 14 hours ago:
Welcome to the jungle. Dow futures have been trading in a 1,000-point range Tuesday after a dark day for Wall Street. https://t.co/pI0SOJb4SP pic.twitter.com/nnQiEsANI4
11.32am GMT
Update: The FTSE 100 is currently down 150 points, or 2%, at 7183 points.
That's the lowest level since April 2017, but a recovery on this morning's one-year low (when the FTSE fell 250 points).
The equity market corrections of the past few days were overdue and not unexpected.
The sell-off appears to be abating at the moment, with US government yields having dropped back to pre-correction levels and market indices and futures bouncing, but changes in market positioning and technicals make short-term predictions of market direction particularly difficult.
11.20am GMT
Volatility in the world's financial markets has soared in recent days, bringing a long period of calm to an abrupt end.
The CBOE VIX index, commonly known as the Wall Street 'fear index', has jumped by 14% this morning to 42.62, a gain of 5.3 points. That's the highest level since August 2015 (when worries over China's economy rocked the markets).
VIX: The 'fear index' has only been this high on 3 prior occasions https://t.co/LXp1FsmGr8 by @Jim_Edwards pic.twitter.com/Rd7hbugr2A
Obscure security linked to stock volatility plummets 80% after hours, sparking worries of bigger market effect https://t.co/T4XyGKmgfE
10.48am GMT
Carlo Alberto De Casa, chief analyst at ActivTrades, says the stock markets love affair with Donald Trump is over.
Rather than revelling in Trump's tax cuts, investors are now focusing on the inflationary impact, and the likely surge in government borrowing to cover the shortfall in revenue.
We are seeing the biggest correction for well over a year on the stock markets but it's too early to call this a crash. In the last few years indices followed a strong bullish trend and so far, this is nothing more than a physiological correction. The violence of the fall seen in the US on Friday and Monday has to be kept in the context of the huge growth of Dow Jones and Wall Street in the last few years.
For Trump however, the long honeymoon between him and the stock markets is well and truly over. Significantly, after years of low inflation, we are now talking about the opposite scenario for the US.
10.46am GMT
Eek. The futures market is now indicating that the Dow Jones industrial average will fall further when trading resumes, in under four hours.
It's still early days (many New York traders will still be asleep), but a sign that Wall Street is somewhat feverish after the biggest daily fall since 2011.
And now we're going down again https://t.co/8LGckFjN55 pic.twitter.com/GqAlFX4tDQ
Volatility continues ahead of the opening bell, Dow futures were up briefly overnight before going back down to red. As of 5:21AM, down 1.09%. https://t.co/6HWdSAH1Wo
10.37am GMT
David Madden, market analyst at CMC Markets UK, warns that there could be more turmoil ahead:
Stock markets are still squarely in the red this morning even though we are seeing a recovery. After another horrendous session in New York last night and Asia overnight equity markets in Europe are feeling the pain.
The sheers size of the sell-offs has sent traders running for the exit. This morning there is some short covering and bargain going on, but the real acid test will be if this short-term move higher can be sustained. Markets don't move in straight lines so this could be the calm before the next storm.
10.32am GMT
A top central banker has called on international authorities to rein in bitcoin.
AgustiIn Carstens, the new head of the Bank for International Settlements, warned this morning that bitcoin had become a combination of "a bubble, a Ponzi scheme and an environmental disaster".
Bitcoin price falls below $6,000 as banker signals crackdown https://t.co/EhCEgbNIjG
10.11am GMT
Time for a quick recap.
$SPX futures are rebounding, as markets seem to have calmed down a bit. European stocks lke #EuroStoxx50 are still flashing red but have also rebounded from the initial declines. $VIX remains high though - interesting days ahead! pic.twitter.com/lProZJzojP
Whilst there was no single event which prompted Monday's sell off, fears over rising interest rates dampening economic growth and the fact that the market is long due a correction, have been weighing on sentiment.
The first signs falling confidence and investors have been surprisingly quick to sell out and book profits from the phenomenal rally over the past few months.
10.04am GMT
Today's sell-off is a great chance to buy stocks, says Michael Strobaek, Global CIO at Credit Suisse.
Strobaek is telling his clients that this week's sell-off is not a crash, and actually an opportunity to snap up shares.
"We still consider the equity bull market to be intact and to have the potential to go further. Yet, as we have said on numerous occasions, the bull market is not going to be as good as what we saw in 2017, and it will be associated with high levels of volatility, as short rates and now yields have left their bottoms and are moving higher.''
Recent risk-off moves in equities do not shake our equities conviction. We see the latest developments as a healthy correction that offers a buying opportunity for clients who wish to deploy cash."
10.01am GMT
Just 12 days ago, US president Donald Trump was bragging to the World Economic Forum that the markets were up 50% on his watch (a slight exaggeration).
He even claimed that they'd actually have fallen 50% if the Democrats had won the 2016 election, as he banged the drum for his tax cuts.
Trolling @POTUS ... today's @FTLex column pic.twitter.com/rHTWz4tKVP
9.44am GMT
The boss of oil giant BP, Bob Dudley, is relieved that the FTSE is only at a one-year low.
BP chief Bob Dudley nods to stock market turmoil today. "Markets in general are a bit turbulent, so I hope to give you some good news...the markets are about the same level as there were on 1 January"
9.43am GMT
Breaking away from the markets briefly. Over at Parliament,former Carillion executives are being grilled over the collapse of the outsourcing company last month. It's being streamed live here.
My colleague Rob Davies is watching. He reports that Carillion's ex-boss is blaming certain clients for its demise, but MPs aren't impressed....
At select committee inquiry into Carillion, former CEO Keith Cochrane says the company took a 400m hit from clients in Canada and the Middle East who heard it planned to exit those markets and, knowing that, tried to avoid paying bills.
Former Carillion CEO Keith Cochrane: "Clearly with the benefit of hindsight, should the board have been asking further, more probing questions, perhaps."
Former Carillion CEO Keith Cochrane: The business got itself into this position.
Frank Field MP: The business didn't, the directors did. It's like lads say, "I didn't stab that guy, it was the beer."
9.33am GMT
Paul McNamara, investment director at asset management firm GAM, reports that it's a rough morning - especially for any trader trying to persuade clients to bet that the markets will be calm:
from where i'm sitting, rough day in the office for most of us. Somewhat worse than that if you're punting vol from the short side.
"The low volatility regime is likely dead - 2017 and early 2018 were a crazy anomaly. So far the blow up is scary but has been relatively contained. This is the largest two-day selloff since the flash crash of August 2015.
A 12% top-to-bottom move in S&P 500 futures is likely the product of a chain reaction that started last Friday when unexpectedly strong US wage growth figures pushed US rates higher. S&P 500 futures are now up 2.6% from their lows."
"While the fall in global equity markets looks dramatic, it is no more dramatic than the record rises we have seen since the end of November. For that reason alone many would argue a correction was on the cards.
"The party may be over for now but this could be more of a sobering correction than a rout.
9.17am GMT
The Dow Jones industrial average is now predicted to rise by 137 points later today.
That would barely make an impact on Mondays 1,175-point rout, but could calm fears that a crash is brewing....
9.10am GMT
There's a glimmer of good news -- the futures market is suggesting that the US stock market may open higher after yesterday's rout.
The S&P Futures contract is currently up around 0.8%, indicating that American shares will claw back some of Monday's slump (when the S&P 500 shed 4.1%).
S&P futuren er ni opp +0.8% #aksjer pic.twitter.com/SdlD7GDBSy
9.00am GMT
After one hour's trading, European stock markets are a sea of red - although they're coming back from their worst levels.
8.57am GMT
Richard Hunter, Head of Markets at interactive investor, points out that Britain's stock market has underperformed Wall Street over the last year - even before today's rout.
He writes:
The recent falls in the Dow Jones has left the index down 1.5% in the year to date - but over the last year, the index remains in positive territory to the tune of 21%.
In terms of the UK, rather more apples have fallen as the tree has been shaken. Over the last year the index is completely flat, whilst in the year to date it has fallen 6.4%. The previous benefit of weaker sterling has evaporated, and whilst participation in the previous rally was somewhat half-hearted, the same cannot be said of the UK market's reaction to the current jitters.
8.52am GMT
Gemma Godfrey, founder of investment site Moola, also blames last week's strong US jobs data for sparking a bloodbath in stocks.
Blood bath: When good news is bad news.. Strong US employment numbers triggered concern interest rates will rise. The US stock market fell by the most in 6 years & fear of an overdue correction has spread across the globe https://t.co/GvCWGWq69A @graemewearden
8.45am GMT
This is one of the roughest mornings for the markets in 18 months:
European stock markets are on track for one of their worst days since the Brexit vote as the global equity rout continues https://t.co/D3mtZ7iqTK pic.twitter.com/xQNAog2aER
8.44am GMT
The smaller FTSE 250 index, which contains more medium-sized UK firms, is also suffering big losses today.
The FTSE 250 is down over 2%, with almost every member falling.
8.37am GMT
It's worth remembering that the stock markets posted some astonishing gains last year, with global stocks gaining 22% and Britain's FTSE 100 up 7.6%..
Economics journalist Dharshini David says the markets are now coming back to earth:
Fall in US shares last 2 days unusual but so was scale of jump in 2017 when equities increasingly decoupled from economic prospects. Bump down to reality inevitable.
8.32am GMT
Mike van Dulken of Accendo Markets says the sell-off is being driven by a 'perfect storm'.
They include:
A strong 2017 rally extending into January, low volatility, low interest rates, over-optimism and complacency, over-leverage and financial engineering, all coming to a head as investors react to the possibility of higher/faster interest rates rises with bond yields creeping higher to jeopardise the current market situation.
8.29am GMT
It's always hard to explain exactly why the financial markets are behaving in a certain way. But many City experts are attributing the sell-off to fears that central banks will soon raise interest rates, ending the era of cheap money.
Last Friday, we learned that American workers have enjoyed the biggest jump in earnings since 2009. That's great news - except it could force the US central bank to hike borrowing costs more aggressively. Investors are now factoring in four American interest rate hikes this year - up from three before.
Related: Why are global stock markets falling?
8.27am GMT
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8.23am GMT
European stocks have fallen to their lowest level since last August, as traders hit the sell button at bourses across the continent.
The Stoxx 600 index, which tracks Europe's biggest companies, has fallen by 3.1% this morning. Germany is having a particularly bad morning, down over 3.5%.
8.17am GMT
The FTSE 100 has now lost 7% of its value so far this year, despite hitting a record high in January.
8.15am GMT
Here are the biggest fallers on the FTSE 100 in early trading:
8.07am GMT
Boom! Britain's blue-chip index of top shares is tumbling at the start of trading, to its lowest level in a year.
The FTSE 100 fell by 255 points, or over 3.2%, to 7079 points, with every share losing ground. It's not been that low since December 2016.
The stock market open in the UK and Europe looks about as bad as it can get. The bloodbath on Wall Street, which was repeated in Asia has seen confidence evaporate in Europe.
7.58am GMT
Hold onto your hats.... the European stock markets are about to open...
7.57am GMT
Cryptocurrencies are also being hammered hard this morning.
Bitcoin has tumbled by 12% this morning, taking the digital currency below $6,000 for the first time this year.
The most famous digital currency has fallen 69% from December's record high, and almost 56% from the start of the year. The slide comes after many banks in the U.S. and U.K. considered banning customers from buying cryptocurrencies using their credit cards.
It seems the war against the crypto-world is far from over, and how the situation involves from here remains unknown, but risks are certainly high.
7.47am GMT
If you missed last night's turmoil (where were you?), here's a reminder of how the Dow Jones Industrial Average took an almighty bath:
7.45am GMT
Risk aversion is "high" in the City today as we head towards the start of trading., says Elsa Lignos of RBC Capital Markets.
She says RBS's 'risk aversion thermometer' hit a 2.5 year high of 27 on Monday - the highest level since China stunned the markets by devaluing its currency in 2015.
That time it took six weeks to turn risk-seeking again.
7.41am GMT
Jamie McGeever of Reuters has a sobering fact -- $4 trillion has been wiped off global markets in the last week. That figure could be somewhat higher by the end of the day....
$4 trillion wiped off global equity markets in the last week pic.twitter.com/NoYS6STQgx
7.39am GMT
Earlier today Japan's Nikkei fell into 'correction territory', meaning it has shed more than 10% from its recent high.
7.31am GMT
The sharp losses on global stock markets in recent days may be a sign that the 'Goldilocks' era is over -- replaced by some aggressive and hungry bears.
Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities., explains:
"Since last autumn, investors had been betting on the goldilocks economy - solid economic expansion, improving corporate earnings and stable inflation.
But the tide seems to have changed."
Global stocks crumble in vicious sell-off as #goldilocks trade unravels. Asia stocks are suffering dramatically deep and broad losses. Dispersion is breathtakingly low, though recent outperformers are worst hit. European shares seen falling 4-6%. pic.twitter.com/NFSBx3btUP
7.14am GMT
Good morning from London.
Asian markets fell sharply this morning - this is Japan's Nikkei pic.twitter.com/ZzzJg0IqjC
Related: Australian and Asian stock markets slide after Dow suffers biggest one-day points fall - live
"There would be few places to hide from the risk-off atmosphere that is expected to extend its stay in Asian markets today in a significant manner.
This is fear rolling over itself,"
European Opening Calls:#FTSE 7093 -3.30%#DAX 12030 -5.18%#CAC 5037 -4.70%#MIB 21892 -4.08%#IBEX 9661 -4.01%
These declines have been a long time coming and in a sense have already started to become self-accelerating. At the end of last year margin debt levels on US stocks were at record highs, helping fuel the rise we've seen in the last few months.
The sell-off in the last few days is likely to reverse this trend, and potentially accelerate it further, particularly if investors start to unwind it over concerns that we could fall further, which seems likely if events in Asia this morning are any guide.
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