Despite a day-long improvement in US shares after the panic of Black Monday, the rally evaporated in the final minutes before the closing bell - with the Dow Jones down more than 200 points, extending Wall Street's losing streak to six day.
Stocks on both sides of the Atlantic improved, showing that the market had got rid of some of its concerns about the slowdown in China.
At one point, the Dow Jones market index was up by as much as 441.
However, in the last 15 minutes of trading, the sell orders began pouring in - sending the market falling below to where it began.
The Dow ended with a loss of 204.91 points, or 1.3 per cent. Other indexes, such as the Standard & Poor 500 and and Nasdaq composite also fell during the day.
The rally, which didn't disappear in the final minutes in Europe, came after China announced it would lower interest rates in an effort to boost the economy.
Following this news, world markets surged once again. For a while it appeared that US markets would follow suit, but they quickly flipped.
The three major US indexes have now lost ground six days in a row, with the Dow falling 1,900 points overall.
China in style
China in style
1/6 China in style
The boutique Songtsam Lodges in Yunnan
2/6 China in style
Mandarin Oriental Pudong
3/6 China in style
Touch the sky: Shanghai
4/6 China in style
Cruise vessels purr along the stretch of the Yangtze between the city of Chongqing and the Three Gorges Dam
5/6 China in style
Terracotta Army at Xi'an
6/6 China in style
High life: some luxury tours include bubbly on the Great Wall
This is the fifth time in nine months that China has cut interest rates, in an effort to shore up economic growth.
It also tried to increase the amount of money available for lending, by reducing the sum of the reserves that banks are required to hold.
Speaking to the Associated Press, Kamel Mallahi, professor at the Warwick Business School, said: "The Chinese economy is going to be on this bumpy road for a while, and it will have ebbs and flows that will no doubt have serious impact on the global economy."
"What we are seeing now is a dress rehearsal of things to come."
Traders are waiting for clarity from America's Federal Reserve, who may raise its key interest rate from near zero for the first time in nearly a decade.
Their policy won't be announced until after a meeting in mid-September. However, former US Treasury Secretary Larry Summer tweeted yesterday, after the crisis of Black Monday, that it was "far from clear" that the Fed would raise interest rates.
As in August 1997, 1998, 2007 and 2008 we could be in the early stage of a very serious situation.— Lawrence H. Summers (@LHSummers) August 24, 2015
More happily, the resurgence didn't flop at the last minute in Europe. The FTSE 100 in London went up by 3.09 per cent, erasing much of the losses suffered on Black Monday.
Germany's DAX and France's CAC-40 also rose.
In Asia things were more generally poor, with the Shanghai stock index falling further, by 7.6 per cent on top of Monday's huge 8.5 per cent loss.
Tokyo's Nikkei closed at 4 per cent down, but markets in Hong Kong and Sydney posted small recoveries.
The Chinese government has resorted to novel measures in the past in efforts to support the markets, including ordering financial firms to buy up shares and telling the media to say good things about the markets.
The huge fall seems to have stopped a little around the world, but China still has many problems to sort out before its markets stabilise.Reuse content