Aug. 24, 2015

A sudden reversal in United States stock prices late in trading on Tuesday produced a sixth consecutive session of losses and heightened uncertainty about the challenges facing global markets.

The wild swings in prices over the last two days have been the most extreme since the financial crisis. The benchmark Standard & Poor’s 500-stock index surged as much as 2.9 percent on Tuesday, but ended down 1.4 percent.

The resurgence of volatility has overturned a sense of comfort among many investors who had grown accustomed to calm markets and steadily rising stock prices in recent years.

While the market turmoil may not yet be flashing warning signs about the United States economy, which still appears to be strengthening, it is pushing investors to take a closer look at their portfolios. Stock prices have generally been rising faster than the profits of corporate America, and that is prompting caution. Even after the recent downturn, investors are still paying more for corporate profits than they have on average over the last 10 years.

“The last two days have been a wake-up call for a lot of portfolio managers,” said Nicholas Colas, the chief market strategist at Convergex, an institutional brokerage firm. “It forces everyone to reconsider their base assumption for things like earnings growth and revenue growth.”

The opening of trading in Asia on Wednesday brought little clarity. Shanghai stocks, which have led the declines over the past few days, swung between gains and losses, and the volatile trading spread across the rest of Asia. Japanese stocks rebounded from Tuesday’s 4 percent drop, but shares in Australia were down.

Some investors have taken a dark outlook, questioning whether the markets — and the broader economy — will be able to abide a coming rise in interest rates that the Federal Reserve has been moving toward for months.

For the time being, there are few doubts that the American economy has been growing, and the economy is unlikely to be significantly hampered by recent turmoil in China. New data reported on Tuesday morning pointed to a healthy increase in consumer confidence in August and a rise in new home sales in July.

But voices like Lawrence H. Summers, the former chief economic adviser to President Obama, have recently joined a chorus of skeptics arguing that the growth may not be able to continue if the Fed steps back from the market, as it had looked set to do in September. Investors have ramped up bets this week that the Fed will have to delay any planned changes in interest rates.

Tuesday provided another reminder of the wide range of outcomes that investors are debating.

Early on Tuesday, investors in markets around the world appeared to take comfort as China, the epicenter of the recent sell-off in global stock markets, took steps to tackle slowing growth in the world’s second-largest economy. The Chinese central bank announced measures intended to lower borrowing costs and stimulate the economy.

European markets rose sharply, and when New York trading opened, stocks surged. The Dow Jones industrial average, which had plunged 1,000 points early on Monday, rose 441 points early on Tuesday in another day of heavy trading.

That optimism, however, slowly faded. And in the last half-hour of trading, the tentative rally fell apart completely. The Dow closed down 204.91 points, or 1.3 percent, at 15,666.44. The S.&P. 500 ended 25.60 points lower at 1867.61, while the Nasdaq composite index closed down 0.4 percent, or 19.76 points, to 4,506.49.

There were no obvious explanations for the sudden decline in prices in the waning minutes of trading, though many investors said it suggested the lack of conviction behind recent market moves.

“It is going to take a week, or a couple of weeks, to have this market stabilize,” said Timothy M. Ghriskey, the chief investment officer at the Solaris Group.

The major stock indexes have all entered into what is known as a correction — a 10 percent decline from the recent high, reached in May. The new declines brought the indexes closer to a so-called bear market, which is a 20 percent slump from recent highs. The Dow is now down 15.5 percent since May. The pullback has erased all of the gains that American stocks had made since early 2014.

Treasury prices, which have benefited from the instability in stock markets, were weaker on Tuesday. The price of the benchmark 10-year note fell, driving its yield — which moves in the opposite direction of its price — to 2.08 percent from 2.01 percent on Monday.

The big moves this week have struck many strategists as an overreaction, particularly given that there are no new major signs of any turn in the economy.

But many investors who focus on the value of stocks, as measured by the price paid for each dollar of profit from a company, say that stocks have further to fall still if valuations are to come in line with historical norms.

Investors were paying $16.80 for every dollar of earnings over the last year — the so-called price-to-earnings ratio — even after Monday’s losses, according to FactSet Research. Over the last 10 years, the ratio has been, on average, $15.70.

“When we are this high, even with this pullback, the track record of future returns isn’t all that good,” Mr. Colas of Convergex said.

Over the last two years investors have bid up the price of stocks in the hope that the companies would experience significant future growth. In recent quarters, though, American corporate profits have been falling on a year-to-year basis. Looking forward, many investors are anticipating slower growth from American companies unless the economy significantly picks up.

Still, all of the negative sentiment could dissolve on Wednesday morning, as it appeared to do for a time on Tuesday morning.

When American stocks opened on Tuesday, European markets were up sharply, recouping most of the losses they had experienced on Monday. The benchmark German index ended the day up almost 5 percent, while France’s benchmark index was up 4.1 percent — all before the markets in the United States began to experience trouble.

Earlier in the day, the markets in China posted deep losses, with Shanghai stocks down 7.6 percent following Monday’s 8.5 percent plunge. But after the markets closed in China, Beijing officials cut interest rates and reduced the amount of money banks are required to keep on hand to guard against risk.

The moves suggested that Chinese authorities are now looking to stabilize the economy, rather than focusing on the problems in the financial markets. But similar past efforts have failed to reverse the country’s problems, and many investors are skeptical that the latest measures will be more effective.

In the United States and Europe, too, there are growing fears that the central bankers have done everything in their power and now need to rely on some outside assistance.

Mohamed A. El-Erian, chief economic adviser at Allianz, wrote on Facebook that Tuesday’s reversal will “erode the faith that market participants have in the power of central banks to repress volatility.”