Brazil has seen a strong surge in its economy in the past two years. Trade relations with China, a significant importer of Brazilian goods, especially soybeans, have bolstered its financial strength in Latin America, and there is strong evidence of its economic boom from 2007. Last year, around 60,000 Brazilians became millionaires for the first time.
Economist Adhemar Mineiro puts it down to the Brazilian economy's strength being linked to domestic growth but said there is still a dependence on international credit programs, which could threaten the continuation of such growth.
"A U.S. recession could affect the Brazilian economy," Mineiro told ABC News. "That dynamism that was seen last year will continue to be visible in the markets here during the first trimester, but there is uncertainty if it will be seen in the second trimester."
Brazilian President Luiz Inacio Lula da Silva said Tuesday that while he was not yet troubled by the U.S. developments he would step in if the situation deteriorated. In the meantime, people here are looking north to gauge what Brazil's next financial move may be.
It was an up and down and up again day on the European markets, with all eyes looking toward Wall Street.
While some experts called it a roller coaster kind of day, others were quick to put a calming tone to it.
"We saw kind of a stabilization today," Joerg Kremer, chief economist at Commerzbank Headquarters in Frankfurt, told ABCNews.com. "The U.S. interest rate cut had a short-term effect; it sure has prevented another sharp fall. Whether this is going to have a long-term effect remains to be seen."
Though they started the day mostly down, news of the U.S. rate cut sparked immediate excitement on trading floors.
London's FTSE index shot up 2 percent in a matter of minutes. But that euphoria was short-lived.
Speaking to traders here in the middle of the mayhem, many said the interest rate cut actually worried them.
"If the cut is so big, the Fed must really believe things are bad," one U.K. trader said when interviewed by ABCNEWS.com.
Still, by the end of the day, lower U.S. interest rates were beginning to do their work, helping to bring up two of the major indexes.
London's FTSE finished up 2.9 percent and France's CAC 40 up 2.07 percent.
However, Germany's Dax, one of the hardest hit in recent days, added to its losses, closing down 0.31 percent.
"It was a bit like a yo-yo day," Joachim Llambi of Concord Investment Bank in Frankfurt told ABC News. "I think we're not over the hill yet, but at least we did not suffer the kind of losses that the Asian markets had. We're still watching developments amid concern that the U.S. is heading into recession, and things remain very exciting, because whenever the U.S. has a cough, Europe comes down with the flu."
Some newspapers in Germany dubbed it Black Monday, pointing to the market's worst one-day percentage fall since the 9/11 terror attacks.
Germany's best-selling tabloid Bild Zeitung prominently displayed the dreaded C-word (as in Crash) on its front page in big headlines: "Börsen Crash -- What does that mean to your money?" reflecting what many people here ask.
Experts, however, urged investors to stay calm, and some actually suggested that private investors should take advantage and buy some cheap stock.