NEW YORK, United States (AFP) — Global markets mostly tumbled again on Tuesday, August 30, extending losses sparked by last week’s Federal Reserve warning that more tough anti-inflation steps are on the way.

Wall Street indices tumbled around one per cent, quickly dashing any hopes of a “turnaround Tuesday” after a small rebound in share prices prior to opening.

London’s FTSE 100 also closed lower after a public holiday the day before, while the Paris CAC 40 fell after staging a rally earlier in the day.

The Frankfurt DAX bucked the trend to end the day up 0.5 per cent.

Elsewhere, Asian stocks indices diverged on Tuesday, winning limited support from bargain-buying.

Most markets have been slumping since Friday after Federal Reserve chief Jerome Powell warned of more interest rate hikes ahead — and no chance of a policy pivot — as it fights four-decade high inflation, even at the cost of economic pain.

A closely watched US survey found Americans consumers to be happier about the state of the economy than expected, and more willing to spend. And official figures showed job openings increased last month.

The strong data will boost the idea that the US economy does not need extra help from the Fed, said Ipek Ozkardeskaya, Swissquote Bank analyst.

“Cherry on top: the consumer sentiment regarding the future is improving,” she said. “Hence, there is no reason for the Fed to soften its stance.”

Central banks are scrambling worldwide to tame consumer prices that have surged higher since Russia invaded Ukraine in late February.

German inflation data showed consumer prices rose by 7.9 per cent in the year to August as the ongoing energy crisis further stoked price pressures.

In Spain, the inflation rate slowed to 10.4 per cent in August as fuel prices eased, but it remained elevated due to rising electricity and food prices.

The European Central Bank — which raised interest rates for the first time in over a decade in July — is expected to hike them again when it meets next week.

Energy prices retreated on Tuesday, however, with oil contracts tanking on fears about a major hit to demand from any global economic slowdown — and more COVID restrictions in key consumer market China.

Brent North Sea crude fell below $100 per barrel.

Natural gas prices, which have soared this year over supply disruptions from key producer Russia, dipped in Europe as German Chancellor Olaf Scholz said government measures have left his country better prepared to cope with further delivery cuts in the winter.

Many European countries are facing severe supply problems as Moscow turns off the gas taps in response to EU military and diplomatic backing for Ukraine.

Russian energy giant Gazprom plans to suspend gas deliveries through the Nord Stream pipeline, which runs to Germany, for three days of “maintenance” work from Wednesday.