Donald Trump has stepped up his pressure on America’s central bank to shelve plans for an expected increase in interest rates to prevent the bleakest December for Wall Street since the US was in the throes of the Great Depression.

After days of heavy stock market falls, Trump tweeted before New York trading opened on Tuesday to warn the Federal Reserve that it would be compounding previous mistakes if it continued to ratchet up US borrowing costs.

The broadly based S&P 500 share index has lost more than 7% of its value since the start of the month, leaving it on course for a fall not surpassed since the near 15% drop in 1931.

Both the S&P and the Dow Jones Industrial Average – the gauge for the stock market performance of America’s 30 leading companies – posted tentative rallies in early trading on Tuesday. The Dow finally closed the day 83 points (0.35%) up while the S&P was barely higher than the day before.

But the modest recoveries were not enough to prevent the FTSE 100, the index of leading UK shares, dropping more than 70 points to close at its lowest level in more than two years.

On the commodity markets, the cost of oil fell to its lowest level in more than a year amid concerns that recently announced production curbs will prove insufficient to stabilise prices if the recent stock market turbulence heralds the start of a pronounced global economic slowdown.

All the other major European bourses also lost ground following overnight falls in Asia markets, prompted in part by disappointment that China’s leader, Xi Jinping, had failed to sketch out a reform package for his country’s debt-burdened economy.

Stock markets continue to be nervous about the risks of a trade war between the US and China, with fears of protectionism also affecting confidence in Germany, an economy heavily dependent on exports.

After a cumulative 1,000-point drop in the Dow on Friday and Monday, Trump seized on an editorial in the Wall Street Journal that called on the Fed to be “prudent” and put a long-signalled rate rise on hold.

“I hope the people over at the Fed will read today’s Wall Street Journal Editorial before they make yet another mistake. Also, don’t let the market become any more illiquid than it already is,” he wrote. “Feel the market, don’t just go by meaningless numbers.”

Trump has made clear his unhappiness with Jerome Powell, the man he chose to run the Fed, over the past few months and has intensified his attacks as the markets have wobbled.

On Monday the president said it was “incredible that with a very strong dollar and virtually no inflation, the outside world blowing up around us, Paris is burning and China way down, the Fed is even considering yet another interest rate hike.”

Despite the arm-twisting from the White House, Wall Street expects the Fed to underline its independence by going ahead with a fourth quarter-point increase in interest rates during 2018. Rates are currently in the range of 2% to 2.25%.

But investors believe there is a chance the recent market turbulence could force the Fed to scale back its plans for three further rate rises next year.

The Wall Street Journal editorial said the main argument for a rate pause was that the Fed was unwinding the biggest monetary experiment in history – the prolonged period of zero interest rates and the bond-buying programme known as quantitative easing.

“Central banks around the world are moving away from multitrillion bond purchases and zero interest rates, and they’re doing it without a roadmap,” it said. “What is the ‘normal’ interest rate at this point? We don’t know, and we doubt the Fed does either.”