Asian and European stock markets mostly nursed losses Wednesday on resurgence of concern that sharp interest rate hikes aimed at tackling runaway inflation could spark a recession, dealers said.
The Wall Street tumbled after a gloomy US consumer confidence report sent it to a close on Tuesday.
The Dow added 0.3 percent on Wednesday, while the tech-heavy Nasdaq fell slightly.
European sentiment was boosted by the data showing Spanish inflation rose to a 37 year peak of 10.2 percent in June due to rising energy and food prices.
The Madrid stock market was down 1.3 percent, with Frankfurt showing a similar loss. Paris lost 0.8 percent. London broke into the green and showed a small gain.
So much for the big stock market comeback. Another day, another sea of red on the market, said AJ Bell investment director Russ Mould.
The selloff followed more than a week of global gains due to hopes that any signs of contraction could give central banks room to relax on their pace of monetary tightening.
New York stocks fell Tuesday on data showing confidence among US consumers - a key driver of the world's top economy -- had fallen to its lowest level in more than a year.
The data re-ignited stubborn worries about the strength of the world economy and eclipsed news of a surprise move by China to slash the quarantine period for incoming travellers.
The country's giant economy is expected to recover faster due to the relaxations that have been made by the country's giant economy.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown said that investors are worried that global growth will go down the drain with signs that consumer confidence is seeingping away.
Covid restrictions for international travellers to China may have been loosened because infections rates slow, but one global problem is being replaced by another fear that recessions are looming around the world. Fed officials tried to play down the chances of a recession, expressing hope of a soft landing.
A city index analyst Fawad Razaqzada said there was a threat of high inflation and a recession, a phenomenon economists call stagflation.
That is where the global economy is headed, and central banks won't be able to do much about it, he said in a note to clients.
If they tighten their belts too tightly, this will hit GDP, while if they loosen their belts, this will only fuel inflationary pressures. Oil prices rose due to expectations of demand growth as China lifted Covid restrictions and tight supplies after the ban on Russian imports.
Observers warned that G 7 plans to have a price cap on Russian crude wouldn't have a huge impact on benchmark values.
London FTSE 100: UP less than 0.1 percent at 7,328. 75 points are scored.
Brent North Sea crude: up 1.3 percent at $119.55 per barrel.
West Texas Intermediate: up 1.3 percent at $113.24 per barrel.
The euro dollar is DOWN at $1.0507 from $1.0519 Tuesday.