US stock markets swung rapidly on Tuesday, amid frantic Wall Street trading triggered by earlier losses.

Shares opened about 2% down, and have shuttled in between positive and negative territory throughout the day.

The Dow Jones and Nasdaq are now nearly 2% ahead, while the Nasdaq is up by nearly 1%.

Investors are fretting over the prospect of rising interest rates, which push up borrowing costs for companies and consumers.

The gyrations followed steep declines on Wall Street on Monday, which sparked a sell-off in Asia and Europe.

Analysts have been forecasting for months that the financial markets were due a correction after a long period of rising prices.

Earlier on Tuesday, markets in London, Frankfurt and Paris had initial losses of up to 3%, before recovering some ground. Japan’s Nikkei 225 closed down 4.7%.

The steep sell-off began last week after data in the US showed stronger than expected wage growth.

The report came amid other shifts, including new tax cuts, trade tensions, and a sinking dollar, that analysts say could lead inflation to rise faster than expected.

The conditions pose a challenge for the Federal Reserve, which will need to raise interest rates to counter inflation without moving so aggressively that it severely curbs economic activity.