Police and city officials issued swift statements following the incident and promised an investigation.
According to police, 30 officers were injured in the protests, a lot of them from being struck by projectiles such as bricks and rocks.
State and local officials have called for transparency and a thorough investigation into Mr Wallace's death, including the release of body camera footage from the two officers who fired their weapons.
"Put the knife down", one of the officers shouted in the video, which panned away as officers opened fire.
Tuesday's rallies began peacefully but grew confrontational as darkness fell, just as on the previous day.
Wallace's father, Walter Wallace Sr. said Tuesday night that he is haunted by the way his son was "butchered". At other times, police in riot gear shoved jeering protesters back from barricade lines. Police took to Twitter late Tuesday to announce there were about 1,000 looters in the area of Castor and Aramingo streets alone.
Wallace, 27, was shot after a confrontation with police in West Philadelphia on Monday.
Kenney, the mayor, said he had spoken with Wallace's family "to hear their concerns firsthand, and to answer their questions to the extent that I am able".
In a video on social media, the man, who was later identified as Wallace can be seen advancing towards the police at one point.
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Mr Wallace advanced toward the officers, who then fired several times, said police spokesperson Officer Tanya Little.
Mr Wallace was rushed to the hospital where he died later. CBS Philly reports that most of the officers are in stable condition, but one officer was hospitalized with a broken leg and other injuries after she was struck by a pickup truck.
Some stores in Philadelphia closed early Tuesday to prepare for another night of potential unrest following the Monday death of Walter Wallace.
The Wallace family's attorney, Shaka Johnson, said the victim's wife, Dominique Wallace, is pregnant and is scheduled to have labour induced Wednesday. "Why you have to gun him down?" he added, saying that his son was on medication.
Police cars and dumpsters were set on fire as officers struggled to contain the crowds.
Philadelphia erupted in violent protests and looting caught on social media that evening.
Numerous protests have accused the police of racism and brutality, but President Donald Trump has focused on the unrest to bolster his claims of being the "law-and-order" candidate in his election battle against Biden.
REPORTER: In the months since the May 25 death of George Floyd, a 46-year-old African-American killed by a white police officer, demonstrators have turned out nationwide to demand racial equality and an end to police brutality, with protests sometimes turning violent.
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