Wall Street is poised for another down day Tuesday as Asian and European markets suffered multi-percentage-point losses overn...

Wall Street is poised for another down day Tuesday as Asian and European markets suffered multi-percentage-point losses overnight as fearful investors continued to respond negatively to the U.S. debt downgrade, instability in Europe, and the prospect of a dip back into global recession.

The losses, which put some markets into official bear market territory with declines of 20 percent or more from recent highs, came as U.S. futures were also sharply down as the Federal Reserve committee that makes monetary policy meets to discuss whether it will take steps to stabilize the economy and financial markets.

The president of the European Central Bank said Tuesday that Europe is in the midst of an historic crisis that would have gotten even worse had his institution chosen not to stabilize bonds in Italy and Spain.

“It is the worst crisis since World War II and it could have been the worst crisis since World War I if leaders hadn’t taken the important decisions,” Jean-Claude Trichet said in an interview with French radio station Europe 1, The Associated Press reported.

After suffering deep losses on Monday, U.S. markets were set to open lower on Tuesday. Futures for the Dow Jones Industrial Average were down more than 100 points – 1 percent – while Nasdaq and S&P 500 futures were also down by about the same percentage.

The Dow was plummeted 635 points yesterday in its sixth worst trading day ever; volume on the New York Stock Exchange was the fourth highest ever.

Analysts have begun to see the Fed as needing to take action.

“I don’t think the Fed can stand by,” Mark Zandi, chief economist at Moody’s Analytics, told the AP. “This is a crisis of confidence and the Fed needs to shore up confidence.”

Hong Kong’s Hang Seng suffered dramatic losses of 5.66 percent on Tuesday, and the Seoul composite fell 3.64 percent, but most other Asian markets had smaller losses. In Japan, the Nikkei closed down 1.68 percent, while the Taiwan Weighted was off 0.79 percent.

There was one glimmer of green as the two major Australian indices both closed up more than 1 percent after falling for five straight days.

“If this was only the expectation of a global economic slowdown, the markets shouldn’t be this panicked,” Hiromichi Shirakawa, the chief economist for Japan at Credit Suisse, told the Washington Post on Tuesday. “But markets predict the future, and it’s almost like the markets are predicting something really bad happening in the global financial situation.”

In Europe, some exchanges briefly opened up before plummeting for the eighth consecutive day, putting them on track for their longest losing streak since 2003. As of late morning there, the Stoxx 600 was down 4 percent and England’s FTSE 100 was down about 3.5 percent, while markets in Belgium and France were down just under 2 percent. Germany’s Dax was down 5 percent.

The early red on Wall Street comes ahead of possible action by the Fed, which will have traders anticipating what the central bank might do.

In July testimony to Congress, Fed chairman Ben Bernanke suggested that the central bank might explicitly say how long it plans to keep interest rates in the range of zero to 0.25 percent. For more than two years, the Fed has said it would keep rates at “exceptionally low” levels for an “extended period.”

The Fed might also consider launching a third round of bond buying – QE3 – following the end of its $600 billion second round on June 30.