Frenzied trading swept through global financial markets Wednesday, with the Dow industrials tumbling as much as 460 points before partially recovering and investors scrambling to buy safe-haven government bonds.

Wednesday’s session briefly saw U.S. Treasury yields plunge to their lowest level in 16 months, in what traders said was the sharpest move in years, and the S&P 500 stock index wipe out its gains for 2014. Then both markets made U-turns. Oil prices continued this month’s deep slide, with Nymex crude falling six...