On Monday, concerns about a potential recession in the US influenced financial markets across Asia and Europe.

The Oslo Stock Exchange (Oslo Børs) opened with a sharp fall on Monday morning. This downturn followed a stock market crash on the Tokyo Stock Exchange.

READ MORE: What the Norwegian krone’s fresh slump means for your finances

Similar declines were seen in other Scandinavian capitals, such as Copenhagen and Stockholm.

Wall Street mirrored this negative trend, with the Nasdaq technology index plunging over 6 percent at the opening.

By the end of the trading day, Nasdaq closed down 3.43 percent, the S&P 500 fell around 3 percent, and the Dow Jones ended down 2.6 percent.

Despite a notable rebound on the Tokyo Stock Exchange on Tuesday, with the Nikkei index rising more than 10 percent, the dramatic stock market fluctuations have left Norwegian consumers worried about their savings invested in the market.

Many were left wondering whether the developments called for action.

Important not to make rash decisions, expert says

Generally speaking, when you see alarming headlines about the stock market, most people shouldn’t do anything – they should sit down and calmly ride the wave out, Américo Fernández, a household economist at the Swedish SEB bank, told The Local on Monday.

“Of course, it’s always dramatic when we have such developments in the stock market in just one or two days,” he said, adding that people with savings in the stock market shouldn’t be that worried.

“I would say that this is how the stock market works: there’s a lot of uncertainty and risk connected.

“When you have savings on the global stock exchanges, this will happen, especially when we’ve had at least six months of really, really good returns – maybe even too good. Then, this is a little bit expected,” he said.

Advice for savers across Scandinavia

Fernández shared his advice for worried savers across the Scandinavian countries, noting that it’s understandable that stock market volatility can raise concerns about the safety of people’s savings.

For those wondering how to protect themselves against such crashes, he emphasised the best strategy is to take a consistent and steady approach to investing.

“The most common thing, the best strategy for the broad masses, is to save every month,” he said, adding that investing in a mutual fund is a great way to go about this.

“In circumstances such as these (note: when there’s a crash), you buy more at a lower price. So, instead of timing the stock market, which is almost impossible, continue your monthly investments through mutual funds. That’s a good way of diversifying your portfolio,” he said.

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The SEB household economist also advised against reacting hastily to alarming headlines.

“It’s understandable that a lot of people are affected by herd mentality when we have these negative headlines. Everyone, but especially households with tiny savings, acts and sells, and then they buy again when the headlines are positive, when the stock exchange is at high levels…

“That is the opposite of what you should do. Try to neglect these things and be cool in these circumstances, even though it seems bad and hurts your wallet,” he noted.

This advice is relevant across Scandinavia, according to Fernández.

“I think it’s applicable across Scandinavia. All Nordic countries save a lot of money on the stock exchange, partially because the pension system isn’t fully funded by the government,” he said.

US financial developments and new stock market tumbles

Is this stock market fluctuation a rare event, or is there more volatility on the horizon?

In recent years, the US stock market had surged on the wings of strong technology optimism, chief economist Elisabeth Holvik at SpareBank 1 told the Norwegian Broadcasting Corporation (NRK) on Monday.

However, recent declines saw technology giants like Nvidia, Apple, and Tesla falling between 4 and 7 percent.

“Now, we see that the economy is slowing down. Industry is slowing down, and consumption is slowing down. One is afraid that the whole economy will slow down too quickly and that the central bank has fallen far behind when it comes to cutting interest rates.

“So, until you get the first interest rate cut, I think there will be great uncertainty and the risk of a further fall in the stock market,” Holvik said.