U.S. stocks opened higher on Tuesday as an uneasy calm returned to global markets after days of sharp declines.

The tech-heavy Nasdaq, the Dow Jones Industrial Average and the S&P 500 all closed higher.

It followed subdued trading in the UK and Europe, with London’s FTSE 100 initially rising before falling again.

In Japan, the Nikkei 225 stock index rose by 10.2 percent or 3,217 points after the previous day’s slump, recording its biggest daily increase.

The stock market crash began on Friday after Disappointing US labor market figures for July This resulted in the unemployment rate rising and raised fears of a recession.

There are also concerns that the stocks of large technology companies – especially those that invest heavily in artificial intelligence (AI) – are overvalued and that some of these companies are now in trouble.

On Monday, volatility increased and spread to Europe and Asia, where Japan’s Nikkei 225 fell 12 percent.

But by the end of Tuesday, the global picture looked more positive:

• The Nasdaq, which has experienced the greatest turbulence in recent days, closed 1% higher
• The S&P 500 rose 1% and the Dow Jones was 0.8% higher
• In London, the FTSE 100 closed 0.2 percent higher, while the German DAX remained unchanged and the French CAC 40 lost 0.3 percent.
• In addition to the stock markets in Japan, the stock markets in South Korea and Taiwan were also able to regain ground after record losses and gained around 3.5 percent.

“The markets were hit by a perfect storm over the weekend, with numerous factors converging to unsettle investors,” said Rachel Winter, partner at Investors Killik & Co.

She added that nervousness about the US election had also contributed to volatility as “markets abhor uncertainty”.

Economists are divided on the outlook for the US economy. Some warn that it is premature to assume that the world’s largest economy is heading for a downturn.

However, if this were to happen, it would have far-reaching consequences.

“What happens economically and financially in the United States does not stay in the United States,” said economist Mohamed El-Erian, who is also president of Queens’ College, Cambridge.

“The United States is the main engine of global economic growth. The U.S. consumer is a very important driver of economic activity. If the U.S. went into recession, the world as a whole would suffer.”

Due to fears of a recession, voices are becoming louder calling on the US Federal Reserve to cut interest rates at its next meeting in September in order to stimulate growth.

Last week, the Fed voted to keep interest rates in the range of 5.25-5.5% – the highest in two decades – while other central banks have opted to cut them.

Some experts believe this was a mistake and that stock markets are likely to remain volatile as a result.

“Markets are very volatile right now and will likely remain so until the Fed decision in September, so we would not rule out rapid fluctuations in either direction,” said Stefan Angrick, a senior economist at Moody’s Analytics.

The sharp decline in Japanese stock prices on Monday was partly due to the problems in the Japanese economy.

Since the Bank of Japan raised interest rates last week, the Japanese currency, the yen, has risen against the US dollar, making Tokyo stocks – and Japanese goods in general – more expensive for foreign investors and buyers.

At the same time, inflation in Japan rose more than expected in June, while the economy contracted in the first three months of the year.

Commenting on the country’s prospects, Jesper Koll, Managing Director of Monex Group Japan, said he continued to have confidence in the country.

“Japan’s fundamentals are strong, the risk of recession is zero and business leaders are determined to improve returns on capital,” he told the BBC.