LONDON - Global markets fell on Thursday as investors worried that further rises in interest rates to quell decades-high inflation would tip economies into recession.

The German economy, Europe’s largest, suffered a sharp loss of momentum at the end of the second quarter, according to the latest Purchasing Managers’ Index, while corresponding figures for France also showed weaker activity.

The STOXX share index of 600 European companies fell 1.3 percent to a new low for the year.

Prices of copper and crude oil sank on prospects of less demand for fuel and building materials as consumers limit spending.

“Copper has always been the lead indicator commodity for economic growth,” said Patrick Spencer, vice chairman of equities at Baird Investment Bank.

US Treasury yields eased after Federal Reserve Chair Jerome Powell, in testimony to the US Senate Banking Committee, underlined the central bank’s commitment to cutting inflation at all costs and acknowledged a recession was “certainly a possibility”.

A Reuters poll showed the Fed is expected to deliver another 75-basis-point interest rate hike in July, followed by a half-percentage-point rise in September, and will not scale back to quarter-percentage-point moves until November, at the earliest.

The MSCI all-country share index was down 0.35 percent, adding to its slide of more than 20 percent for the year. Both Nasdaq futures and S&P500 futures eased about 0.4 percent.

“We are seeing a little bit of lower yields, a bit of haven buying, which suggests that perhaps markets are starting to become concerned about some form of slowdown,” said Michael Hewson, chief markets analyst at CMC Markets.

Such concerns were reflected in the prices of copper and oil, causing a little weakness in equity markets, he added.

“A slowdown is coming and it’s really about degree.”

Powell is set to give his second day of congressional testimony later on Thursday.

Baird’s Spencer said there has been so much damage to stock markets that they had largely discounted a recession already.

“If you look at the data, I think at worst what you are looking at is, maybe, a mild recession. I believe the markets are in a bottoming process, and maybe you’ve only got another 5 percent downside.”

Stocks in Asia were mixed, with South Korea down 1.2 percent while Japan’s Nikkei was flat. Tech shares in Hong Kong staged a strong rebound, rising 2.8 percent after Beijing approved a plan for further development of large payment firms and the fintech sector.

US stocks rallied on Wednesday after Powell’s remarks, which some analysts said did not break any new ground, before giving up gains. The Dow Jones Industrial Average fell 0.15 percent, the S&P 500 lost 0.13 percent, and the Nasdaq Composite dropped 0.15 percent.

Concerns about the demand outlook have sapped commodity prices, with oil tumbling on Thursday to the lowest in more than a month. Brent crude was down 1.7 percent at $109.83 a barrel and US crude declined 2 percent to $104.10 a barrel.

Iron ore was already at six-month lows, having lost more than 20 percent in recent weeks, while copper struck a 15-month trough overnight.

The yield on benchmark 10-year Treasury notes was down slightly, at 3.0926 percent. The two-year yield, which rises with traders’ expectations of higher Fed fund rates, eased to 3.00 percent, compared with a US close of 3.056 percent.

In foreign exchange markets, the dollar rose 0.365 percent against a basket of major currencies. The index was up more than 8 percent this year, reflecting the broad risk-off sentiment and the dollar’s Fed-driven yield advantage.

Gold was slightly lower, with spot prices traded at $1,837 per ounce, little changed on the day.