Financiers' fears were largely allayed on Thursday morning, as European shares opened at a stable price, stemming a brutal selloff fuelled by global recessionary fears.
The pan-European STOXX 600 index was flat at 08:28 GMT, after dropping to near six-month lows in the previous session with thin trading volumes as markets in Italy, Austria and Greece were shut for a public holiday.
Weighing on the benchmark index was a drop among interest-rate-sensitive banks as eurozone government bond yields went further into negative territory.
The US Treasury bond yield curve inverted on Wednesday for the first time since 2007 and remained inverted for the second straight trading session, the clearest signal yet that the world's largest economy may tip into a recession.
Alarm bells
Bonds are essentially low-risk, low-reward loans to governments. Investors are offered greater returns the longer they invest for.
The bond yield curve inverts when short-term (three-month or two-year) government bonds become more desirable than long-term (ten-year) bonds.
And when that happens, a recession is usually on the way.
Equity investors have been seeking safe-haven assets, following a slew of weak data suggesting a slowdown in global growth amid the ongoing US-China trade war, as well as geopolitical tensions in certain emerging economies.
Don't panic
"It's clear that some repricing is happening as we had a good start to the year, but the last few months have been truncated by the trade war issue," said Geoffrey Yu, head of the United Kingdom Chief Investment Office at UBS Wealth Management.
"It's going to take a lot more than just one day's move or a couple of data points in a single day to really confirm a recession," Yu added.
The US curve inversion increased pressure on the US Federal Reserve to cut interest rates, with traders currently pricing in a quarter-point rate cut at each of the Fed's remaining three policy meetings in 2019.
London's FTSE 100 underperformed its European peers, weighed down by oil majors and several heavyweight stocks that traded without dividend entitlement.
In earnings news, strong numbers from beer maker Carlsberg and shipping group AP Moller-Maersk pushed shares of both Danish companies higher.
Drillisch and United Internet slid lower after the German telecom firms cut their profit outlook.
