But on Thursday, official data revealed US unemployment claims rose by less than expected.

The benchmark S&P 500 index ended the day 2.3% higher. The Dow Jones Industrial Average rose 1.8%, and the Nasdaq jumped 2.9%.

In London, the FTSE 100 ticked up 0.7%. Stock markets indexes in Paris and Frankfurt followed a similar path.

Stocks in Asia made modest gains, recovering some of the losses after Japanese indexes had their worst day since 1987 earlier in the week.

“The [US] latest jobless claims data, though not normally a major market event, supports the view that recent pessimism may have been overdone,” said UBS Global Wealth Management.

Official figures from the US Labor Department showed first-time claims for unemployment benefits in the US had fallen more than expected to 233,000 last week.

But despite the apparent recovery in global markets, analysts warn that trading will likely remain choppy for the time being.