Stock indexes across Europe opened higher but then slumped, and were down by about 1 percent by late morning. The Stoxx Europe 600 fell 1.2 percent, after climbing as much as 1 percent, extending its losses into a sixth consecutive day. The index was at its lowest level since March 2021. The FTSE 100 in Britain declined 1 percent and the DAX in Germany fell 0.9 percent.
“Investors are just re-evaluating global risk,” said Bruce Pang, a Hong Kong-based analyst with China Renaissance Securities. “They want to play it safe.”
On Tuesday, government bond yields retreated from their recent highs. The yield on 10-year U.S. Treasury notes fell to 3.30 percent. The day before as stocks plunged, the yield jumped to 3.36 percent, the highest since 2011.
At the same time, cryptocurrencies continued their decline amid a series of market crashes. On Monday, Celsius Network, an experimental cryptocurrency bank, froze withdrawals, panicking depositors. Bitcoin slumped to its lowest since 2020. By early morning in New York, it fallen 7 percent in the past 24 hours, according to CoinMarketCap.
Investors have been trying to make sense of what’s happening in the global economy.
The World Bank issued a grim warning last week, saying recession will be hard for many countries to avoid. On Monday, the credit rating firm Fitch cut its 2022 forecast for global gross domestic product, or G.D.P., to 2.9 percent, from a March estimate of 3.5 percent. These are just the latest in a series of global economic downgrades as Russia’s protracted war in Ukraine strains already stretched global supply chains, disrupts trade and pushes up the prices of oil, wheat, metals and other essential commodities.
As inflation surges, central banks around the world from Australia to Canada have been moving to raise rates. On Thursday, the Bank of England is expected to raise its benchmark rate for a fifth consecutive meeting. Last week, the European Central Bank said it would raise its rates next month for the first time in more than a decade.