That triggered further panic on Monday, with the global benchmark S&P 500 index of U.S. stocks slumping 2.7 per cent in what has been dubbed the "Mnuchin massacre". Canadian markets were closed Wednesday, Boxing Day.
However Chinese stocks were lower while there was also a mixed response in Europe with France's Cac 40 opening more than 1% higher but Germany's Dax slipping back. Britain's FTSE 100 was flat at 6,685.64.
"Wall Street is running around like a chicken with its head cut off, while Mr. and Mrs".
The S&P 500 entered bear market territory Monday, dropping just more than 20 percent from its 52-week intraday high.
Panic gripped NY on Christmas Eve and spread to Tokyo on Christmas Day, putting paid to any chance of the traditional "Father Christmas rally" that has cheered investors each December for the past six years. South Korea's Kospi was less than 0.1 per cent higher at 2,028.44.
The consumer staples sector is the relative outperformer during these sell-offs, averaging a decline of 6.08 percent.
"Although his intention was a very good one, the net feeling I think was, 'Is there a bigger problem that we don't know about?'" J.J. Kinahan, chief market strategist at TD Ameritrade in Chicago, told Reuters.
Asian markets closed mixed: Tokyo's Nikkei added 0.9 per cent, Hong Kong's Hang Seng 0.4 per cent lower, and China's Shanghai Composite 0.3 per cent lower. Indeed, holiday sales increased 5.1 percent on the 2017 season to over $850 billion (€747 billion). Stocks climbed in Taiwan and throughout Southeast Asia.
Earlier this week, the NY stock exchange recorded its worst-ever Christmas Eve plunge, following reports that US President Donald Trump had considered firing Federal Reserve chairman Jerome Powell.
But what really might have pushed stocks over the top was a signal from Washington that President Donald Trump would not try to oust the chairman of the Federal Reserve.
People walk on Wall Street in front of the New York Stock Exchange (NYSE) in New York February 6, 2018. It said US shoppers spent more than $850 billion this year, both online and offline.
President Donald Trump put on his market-strategist cap on Christmas Day and said investors could view the current environment as buying opportunity. Chris Weston of Pepperstone Group Limited said in a market commentary.
The stagnation in the progress of resolving the trade war between the US and China supported by the Federal Reserve's increasing interest rate have continued to take a toll on the global economy and major stock markets in leading regions such as Japan, South Korea, and China. People have been heading for the exits and selling their positions over the last two weeks. Consumer discretionary, energy and technology were leading the way.
OIL: Benchmark US crude added 1.4 percent to $43.11 a barrel in NY.
Analysts also took heart from a almost nine percent jump in U.S. oil prices, the biggest in more than two years and another bounce back following recent weakness in petroleum markets. Brent crude, used to price global oils, gained 7.9 per cent to $54.47 a barrel in London.
The U.S. dollar strengthened to 111.13 yen from 110.41 yen on Monday. Copper gained 1.5 percent to $2.70 a pound.