US and European stock indices mostly rose Wednesday, a day after markets sold off over a slew of concerns including high energy prices, rising bond yields and the threat of a US debt crisis.

European bourses rebounded solidly from Tuesday's dive, a trend that held early in the day in New York.

However, Wall Street equities had a choppy session on the whole, and the Nasdaq ended lower as investors reassess equity bets in the expectation of higher interest rates.

"It's just a case of seeing interest rates are moving up and you're seeing some of the air come out of high multiple stocks," said Briefing.com analyst Patrick O'Hare.

The movement follows a jump in US Treasury yields after the Federal Reserve signaled plans to taper its bond-buying stimulus later this year.

Markets have also fretted as Congress remains deadlocked over raising the United States' debt ceiling, which could cause the world's top economy to go into default for the first time.

London shares were buoyed partly by a weak British pound on fears of stagflation, the vicious mix of high inflation and low economic growth.

The dollar also strengthened against the euro and the yen.

Oil prices dipped one day after Brent had surged close to a three-year peak above $80 on tight global supplies.

"Stocks are in rebound mode today after Tuesday's drop, as some of the stagflation concerns ease and bargain hunters pile in," said Chris Beauchamp, chief market analyst at IG.

Even so, he cautioned that more oil price rises would "put inflation back on the menu of market worries... which could undo some of today's tentative stock market recovery."

Earlier, Asian markets mostly fell as investors fret over surging inflation, the end of the Federal Reserve's financial support and the US debt standoff.

Ongoing worries about the potential collapse of Chinese property giant Evergrande, an energy crunch in China and the ever-present specter of the Delta coronavirus variant also soured the mood.

Tokyo's main stocks index tanked more than two percent, having enjoyed a strong run in recent weeks on hopes for more stimulus from a new Japanese prime minister.

The ruling party elected former foreign minister Fumio Kishida its new leader Wednesday, putting him on course to take the mantle of Yoshihide Suga.

However Hong Kong, Singapore, Manila and Jakarta rose.

Treasury Secretary Janet Yellen warned of terrible economic consequences if US lawmakers did not lift the debt ceiling and the country defaulted
Treasury Secretary Janet Yellen warned of terrible economic consequences if US lawmakers did not lift the debt ceiling and the country defaulted POOL / Kevin Dietsch

New York - Dow: UP 0.3 percent at 34,390.72 (close)

New York - S&P 500: UP 0.2 percent at 4,359.46 (close)

New York - Nasdaq: DOWN 0.2 percent at 14,512.44 (close)

London - FTSE 100: UP 1.1 percent at 7,108.16 (close)

Frankfurt - DAX: UP 0.8 percent at 15,365.27 (close)

Paris - CAC 40: UP 0.8 percent at 6,560.80 (close)

EURO STOXX 50: UP 0.5 percent at 4,080.22 (close)

Tokyo - Nikkei 225: DOWN 2.1 percent at 29,544.29 (close)

Hong Kong - Hang Seng Index: UP 0.7 percent at 24,663.50 (close)

Shanghai - Composite: DOWN 1.8 percent at 3,536.29 (close)

Euro/dollar: DOWN at $1.1604 from $1.1683 at 2100 GMT on Tuesday

Pound/dollar: DOWN at $1.3419 from $1.3537

Euro/pound: UP at 86.38 pence from 86.31 pence

Dollar/yen: UP at 111.98 yen from 111.50 yen

Brent North Sea crude: DOWN 0.6 percent at $78.64 per barrel

West Texas Intermediate: DOWN 0.6 percent at $74.83 per barrel