Shares on Wall Street suffered their sharpest one-day falls in months, as investor fears about rising interest rates, inflation, trade tensions intensified.
The tech-heavy Nasdaq led the declines, sliding 4%, or 315.9 points, to 7,422.
The Dow Jones and S&P 500 also fell by more than 3%, with losses accelerating towards the end of the day.
The slides extended declines in Europe, where exchanges in Germany and France ended the day down more than 2%.
The Dow fell 831.8 points, or 3.15% to 25,598.7. The S&P 500 dropped 94.6 or 3.29% to 2,785.6 – levels not seen since early February.
Shares in the US energy sector saw some of the steepest declines on Wednesday, as investors reacted to shutdowns caused by Hurricane Michael in Florida and the Gulf of Mexico.
Oil exploration firms Hess Corp and Marathon Oil fell about 7%, while Chevron was down about 3%.
The turmoil also comes ahead of the earnings season, when companies will provide updates to investors about their outlook for the rest of the year.
“The big concern isn’t really what third quarter earnings numbers are, but really what the outlook for the fourth quarter and first quarters are,” Oliver Pursche, vice chairman and chief market strategist at Bruderman Asset Management, in New York, said.
US markets have done better than expected this year, bouncing back after turmoil in February to set new records over the summer.
But the Federal Reserve is raising interest rates, which is expected to make it more expensive for companies to borrow and make stocks a less attractive investment.
Yields on US Treasuries have hit their highest level in seven years.
Corporate expenses, such as worker pay, have shown signs they are increasing.
US tariffs on steel, aluminium and Chinese goods are another factor that could drive up costs and force companies to lower their forecasts, Mr Pursche said.
“I suspect that’s one of the things underlying market concern,” he said.