Updated from 12:48 a.m. EDT

Asian stock markets rebounded Tuesday with Hong Kong's Hang Seng index closing up more than 14% after several days of major declines.

Japan's Nikkei 225 stock average finished higher by 6.4% to 7621.92 in a volatile session. At one point during the day the index fell below 7000. Shares of exporters rose on a weaker yen. Honda Motor ( HMC) shares finished higher despite reporting a 41% decline in quarterly profit.

The Hang Seng index rose 14.4%, one day after closing with a loss of 13%. The S&P/ASX 200 index in Australia fell 0.4%.

Stocks in Europe were higher as BP PLC ( BP), Europe's second-largest oil company, reported an increase of 83% in third-quarter earnings. The FTSE 100 index in London rose 1.9%, while the DAX in Germany rose 5.2%.

Stock futures in the U.S. indicated a higher opening on Tuesday. S&P 500 futures rose 38.40 points to 873.10, and were 25.44 points above fair value. Nasdaq futures rose 49.50 points to 1211.50, and were 39.25 points above fair value.

The Federal Open Market Committee begins a two-day meeting where it is widely expected to cut interest rates.

After a lower open and a sizable rally in afternoon trading, the three major averages sold off sharply into the close as the prospect of a global recession continued to loom. The Dow Jones Industrial Average ended with a loss of 203.18 points, or 2.4%, at 8175.77. The S&P 500 lost 27.85 points, or 3.2%, to 848.92. The Nasdaq was down 46.13 points, or 3%, at 1505.90.