The tumble came after the Dow Jones industrial average closed 831.83 points lower, its third-worst point decline ever, in NY trading on Wednesday amid concerns over a rise in interest rates.
Rising bond yields have been drawing investors out of the stock market, and the best-performing stocks over the past year took some of the biggest losses Wednesday.
Some of America's biggest tech stocks were caught up in the sell-off, with Netflix (Xetra: 552484 - news) down 8%, Microsoft (Euronext: MSF.NX - news) sliding 5%, Amazon off by 6% and Google's parent company Alphabet (Xetra: ABEA.DE - news) down 5%.
The S&P 500 index sank 95 points, or 3.3 percent, to 2,786, its fifth straight drop.
Bond prices rose. The yield on the 10-year Treasury fell to 3.17 percent.More news: Nick Kyrgios rows with umpire during Shanghai Masters first-round exit
The S&P 500 was down 55 points, or 1.9 percent, at 2,824-on pace for its worst day since June. All 30 of the Dow's stocks were in the red and it fell below 26,000 total points for the first time in a month, CNN reported.
USA shares are set for big declines when markets open Thursday.
US crude dropped 3 percent while Brent crude, the worldwide standard, dropped 3.4 percent.
The recent turbulence in financial markets is a contrast to what investors have grown accustomed to in a bull market that has lasted more than 10 years, the longest in history.
While stocks fell, the price of gold jumped by 2.5pc to $US1,222 an ounce as investors rushed to safe-haven assets.More news: Samsung plans to bring 4 cameras to its Galaxy A9 Star Pro
The price of the bond with the lower interest rate, known as its coupon, will fall enough to raise the yield to mirror the higher rate.
Shares in upscale jewellery retailer Tiffany & Co and perfume maker Estee Lauder both fell 7 percent after a warning from French luxury goods firm LVMH about softening demand in China.
U.S. stocks notched solid gains in the third quarter as investors brushed aside worries about trade wars and focused on strong corporate earnings and solid USA economic data. (NASDAQ: NFLX) were among the hardest hit stocks of the past 48 hours, tumbling 7.5 percent and 9 percent, respectively.
Gina Martin Adams, chief equity strategist for Bloomberg Intelligence, said the stocks have become more volatile in the last few months because investors have concerns about their future profitability. The Dow's percentage decline doesn't crack the top percentage declines. The FAANGs, spread over three sectors, were down between 1.4 percent and 5.4 percent.
All 11 sectors in the S&P 500 are lower, with banks and energy stocks the hardest hit.More news: Manchester United's Paul Pogba
The dollar fell to 111.94 yen from 112.59 yen, and the euro rose to $1.1594 from $1.1525.