Asian and European stocks rebounded Friday on China’s interest rate cut, but US equities gyrated amid fears that sky-high inflation will spark a recession. “Markets have been looking for an excuse to bounce, and a China rate cut provided the reason,” IG analyst Chris Beauchamp told AFP. The People’s Bank of China announced it would lower its five-year loan prime rate — a key interest rate governing how lenders base their mortgage rates — to 4.45 percent from 4.6 percent. The move is in contrast to other major central banks — like the US Federal Reserve and the Bank of England — that are raising borrowing costs to combat rocketing consumer prices. The Chinese move sparked optimism among traders that it could boost the world’s second-largest economy from its Covid-induced stupor. “The rate cut announced by the PBOC is obviously good news and is clearly targeted at revitalising the ailing property market which continues to suffer due to the crackdown last year and Covid lockdowns this year,” said Craig Erlam, senior market analyst at OANDA. “This could help to revive a hugely important part of the economy,” he added, but “whether it’s enough to help China hit its 5.5 percent growth target this year is another thing.” Asian stocks closed with gains, as did Europe’s main markets although those faded as the day wore on. Wall Street also opened higher but later tumbled, with the S&P 500 temporarily sinking into a “bear market,” a drop of more than 20 percent from a recent peak. The broad-based S&P 500 finished at 3,901.36, basically unchanged for the day, but down three percent for the week and off 19 percent from its January high point. “Stocks remain on a shaky footing,” said market analyst Fawad Razaqzada at City Index and FOREX.com. He said investors are worried about inflation, interest rate hikes, low economic growth, stagflation, and recession. “Perhaps most importantly for stocks, the Fed is not there to provide cushion, like before,” he added, as the US central bank is raising interest rates to combat inflation. Downcast earning reports from retailers have heightened market uncertainty at a time of rising interest rates, surging energy prices, China’s Covid lockdowns and Russia’s ongoing war on Ukraine. Major stock indices have lost huge portions of their value in recent months. In Europe, Paris and Frankfurt stocks are down between 14 and 15 percent, while London’s main index has shed a modest 3.9 percent.