Investors rocketed from panic to rally during a wild Wednesday for stocks, exposing growing fears of a global economic slowdown that will test the strength of the fragile U.S. recovery.

The market chaos was initially sparked by the financial malaise weakening Europe and Asia and surprising slumps in U.S. spending, but it was worsened by the growing specter of the Ebola outbreak.

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A ticker on the side of One Times Square announces a stock sell-off Wednesday on Wall Street in New York. The Associated Press

The Dow Jones industrial average tumbled to what would have been its worst trading day in three years before rallying to close 173.45 points down, at 16,141.74. A “fear gauge” measuring investor apprehension, the Chicago Board Options Exchange volatility index, raced to one of its highest points since the summer of 2012.

For more than a year, Wall Street has appeared unstoppable, unfazed by a tepid economic recovery in the United States and a lingering recession in Europe. Workers watched their 401(k) retirement accounts grow even if their paychecks did not. The climb remained unchecked even as market skeptics warned that stocks were overvalued.

Now analysts increasingly fear that the ride up is coming to an end and that Wall Street is at the beginning of a correction.

“We’ve gone pretty much straight up for five years, and we were due, however painful it is to go through, for a bit of a correction,” said John Canally, an investment strategist and economist at LPL Financial.

He said such a fast rise doesn’t make a big pullback any easier for investors. “It makes you queasy, makes your stomach churn, makes you wish you could change the past,” Canally said.

Stocks cratered early Wednesday, setting the stage for a rocky session: Within half an hour, the Dow had swung up and down about 600 points. A late rally helped scrub over most of the losses, with the Standard & Poor’s 500-stock index, which had sunk by nearly 3 percent at midday, closing down less than 1 percent.

Unpredicted letdowns in U.S. retail sales, housing and manufacturing spooked investors early. They also remain anxious about whether the Federal Reserve will raise interest rates prematurely – withdrawing its primary tool to grow the economy – while the global economy remains weak. But key Fed officials have indicated that they are in no hurry to hike rates.

Analysts said a confluence of global misery played an even larger part in triggering the markets’ big whiplash.

Europe’s slide toward recession, mostly unslowed by policymakers, has undermined investor confidence. Markets tumbled in France, Italy and Greece. Even Germany, the eurozone’s golden child, has begun to disappoint, as evidenced by particularly brutal falls in its industrial production and exports.

Critically low inflation in Europe and a loss of momentum in global growth could bolster the value of a dollar, which Fed officials have warned could bruise American exports and the broader economy.

“We’re the best house in a bad neighborhood,” said Heather Hughes, a markets contributor for CNBC. “But we’re all interconnected. It’s globalization. Europe affects us (whether) those oceans are there” are not.

Worries over international uneasiness are just as visible in Asia, where most of American investors’ favorite multinationals long ago placed their stakes. A big sales-tax bump in Japan, the world’s third-largest economy, has exposed cracks in its fragile recovery. And a housing bubble in China, now past its biggest boom days, threatens to hobble it even more.

The global slowdown has helped demand for oil continue its downward slide, with prices for a barrel of the benchmark grade settling in around four-year lows.

Investors fled stocks for the refuge of safer government bonds, sending yields on 10-year U.S. Treasurys below 2 percent for the first time in 16 months. Those yields, which can influence consumer loans and mortgages, also recovered slightly.

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