U.S. markets rebounded following the Chinese yuan devaluation shock because cooler heads prevailed, analysts told CNBC on Thursday.
A surprise shift Tuesday in how the People's Bank of China (PBOC) fixes the currency initially sparked fears that Chinese leaders were concerned about the country's growth prospects and dragged down global markets.
But on Wednesday, the Dow Jones industrial average erased most of the day's losses after tumbling 277 points, while six of 10 S&P 500 sectors closed in positive territory following big swings across the board between highs and lows.
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The reversal shows that global markets are not panicked, and that they should not be, said George Pearkes, analyst at Bespoke Investment Group.
"As we've gotten more information from the PBOC, as we've seen the yuan fixings go through, as we've sort of come to understand the mechanism they're now using—a very market-oriented one—to set the fixing, I think that fear has really mitigated," he told CNBC's "Squawk Box."