The brief recovery on the German stock market has already stalled again.
After the Dax had increased by up to 4 percent on Wednesday and started positive on Thursday, it soon turned negative.
By late afternoon it had lost 1 percent to 14,290 points.
The Eurozone's selection index, the Euro Stoxx 50, also fell, losing 0.7 percent by the afternoon.
In addition to the dwindling hope of an imminent ceasefire in Ukraine, the interest rate hike continued by the US Federal Reserve on Wednesday evening weighed on the mood.
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It was the first rate hike in the United States since 2018. As expected, the Fed raised interest rates by a quarter of a point to the new target range of 0.25 to 0.50 percent.
Six further rate hikes are on the horizon.
For the end of 2022, America's central bankers consider a key interest rate level in a range of 1.75 to 2.0 percent to be appropriate.
It could be pushed to 2.8 percent by the end of 2023.
They are thus signaling a more aggressive course than many experts had expected.
What does that mean for investors?
"Whereas the markets have taken the interest rate hike cycles calmly in the past, this time it could be different," warns Gregor Hirt, investment strategist at the fund company Allianz Global Investors.
“Because the Fed seems to be adopting a more hawkish stance than originally expected.
Investors should therefore actively look for opportunities for relative yield opportunities.” In contrast to the past few years, he believes that investors should refrain from simply buying “dips”, i.e. taking action when prices drop.
Rather, the new environment calls for a cautious approach on the part of investors.
"Possibly this is the beginning of a period of broader disappointing investment returns," says Hirt.
Because caution is now also required on the bond markets.
The environment is said to be the most difficult for an incipient tightening cycle since the mid-1980s.
"We assume that the Fed will steadily tighten monetary policy," Hirt continues.
"Key interest rates are likely to be raised above the neutral level, which we estimate at 2.4 percent."
yields increase
Bond analyst Birgit Henseler from DZ-Bank commented: "The Federal Reserve made it clear at its interest rate meeting yesterday that it will do everything it can to get inflation under control." current inflation rate in the US of "a worrying 7.9 percent".
The central bankers had made it clear that if necessary they would fight inflation at the expense of economic growth.
Henseler expects that calls for a rigorous fight against inflation in the euro zone will now become louder.
On the bond market, the Fed interest rate hike pushed the yield on ten-year Bunds to over 0.4 percent on Thursday morning, the highest level since the end of 2018. But then buying started again and pushed the yield down to 0.36 percent.
In the case of American government bonds, the yield in the five-year term rose to 2.1154 percent over that of the ten-year title to 2.1101 percent.
When shorter-term interest rates are higher than longer-term ones, this is known as an inverted yield curve.
"The market is pricing in a higher risk of recession, which can be seen in the inversion between the five-year and 10-year yields," said Andrzej Skiba, head of US bonds at RBC Global Asset Management.
Analysts from NordLB also warned of the increasing risk of recession.
"The Fed is now firing on all cylinders and appears very optimistic about the resilience of the (global) economy," they wrote.
"If Russia's war of aggression in Ukraine drags on, we believe the global economy will be severely tested - and such massive interest rate hikes often result in a recession."
The euro, which was able to maintain its recovery from the previous days, was unimpressed by the Fed's move.
At $1.1053, it was back well above levels from the previous week, when worries about the impact of the Ukraine war on the European economy pushed the rate down to $1.0806.
Commerzbank foreign exchange strategist Ulrich Leuchtmann expects the euro to return to $1.16 by the end of the year.
In its central scenario, the war in Ukraine subsides quickly without significant new sanctions.
Based on this assumption, he expects ECB interest rate hikes and a moderate recovery in the euro/dollar exchange rate from October.
The path that the markets will take in the next few days will be primarily determined by the war in Ukraine and monetary policy, says Olivier de Berranger, investment strategist at the fund company LFDE.
For the former, it would be presumptuous to predict any course with certainty, writes the Frenchman.
However, a complete and quick Russian victory seems increasingly unrealistic, with some kind of standstill and return to macroeconomic fundamentals the most likely.
However, the longer the conflict lasts, the higher commodity prices are likely to remain, inflation to remain high and growth to slow.
This also affects monetary policy, so de Berranger advises caution in equities, especially those with high valuations, but also in government bonds, which are losing their main buyers.