Comments during the Asian session from President Obama regarding compromise on the debt agreement saw markets, as well as and European and US futures, surge higher.
The Dow opened approximately 130 points to the upside on the news but the euphoria was short lived.
A weak manufacturing data reading and worries about a potential downgrade to the US credit rating saw markets tumble sharply lower.
When it was all said and done, the Dow sat 11 points below par, well off both the session high and low. The broader S&P and tech-heavy Nasdaq gave up 0.4% each.
The losses in Europe were far more pronounced, with the FTSE shedding 0.7% and the CAC and DAX smashed more than 2.3% each.
Currency markets were equally volatile overnight with the greenback dropping to a record low against the Swiss franc, whilst the Canadian and Australian dollars lost ground as commodities and equities erased gains.
In the commodity space, crude oil fell to a one-month low on the back of the manufacturing data, whilst gold also pulled back from recent all-time highs.
Today’s session will bring us data in the form of building approvals and the house price index, at 1:30am, AEST.
The RBA will also announce the latest cash rate and release its rate statement at 2:30pm, AEST.