Wall Street stocks snapped a two-day skid Thursday on expectations that a weakening US economy will prompt more forceful action from the Federal Reserve, while London shares fell on British recession fears as the country prepares to leave the European Union.

US stocks initially dove after a closely-watched measure of services sector activity in September fell to a three-year low. The report from the Institute for Supply Management came on the heels of jobs and manufacturing data this week that exacerbated recession fears.

But stocks quickly shook off that gloom as markets bet the Fed would step in with more stimulus, analysts said.

Futures markets now overwhelmingly expect an interest rate cut later this month after being divided on that question earlier in the week.

The Dow Jones Industrial Average finished at 26,201.04, up 0.5 percent, after swinging more than 450 points during the session.

FTN Financial’s Chris Low, who has called for aggressive action from the Fed, said the slowdown in the services sector confirmed “serious” economic headwinds.

“The Fed missed their September opportunity, but it is not necessarily too late to act forcefully in October,” Low said. “Keep kicking the can with timid policy responses for too long, however, and there will be a recession.”