Here are five things to watch ahead of Thursday's USA open. Markets in Hong Kong, South Korea, Australia and Southeast Asia recorded similar declines.
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.
What will fall hardest?
Back in late January and early February, there was a 10 percent correction in the S&P 500, with stock investors spooked as Treasury yield increases intensified with a monthly payrolls report showing the biggest wage gains for workers since 2009.
Wall Street stocks plunged Wednesday, with major indices losing more than three percent in a selloff prompted by the sudden jump in USA interest rates.
The index was down 832 points, or 3 percent, at the end of trading Wednesday.
Whether the lower reading will quell expectations the Federal Reserve will hike interest rates again in December remains to be seen, said Yousef Abbasi, global market strategist at INTL FCStone in NY.
US stocks plunged Wednesday as investors ramped up their selling of high-flying technology and internet stocks.
Wall Street shares have fallen sharply as investors sought safety amid growing worries about bond markets and trade tensions.
The Dow Jones Index was down 832 points, while the Nasdaq declined 4.1 percent, its worst session in two years.
"What we're seeing here is the market positioning for potential lower growth".
But a recent International Monetary Fund warning on global growth taking a hit from trade disputes has hit confidence in the stock market, as has US Treasury yields at more than 7-year highs, signalling a tightening of capital globally.
Meanwhile, the tech-heavy Nasdaq has lost 4.1 per cent to 7,422.
"The market is not necessarily going to take out much from the yield path", Goncalves said. The stock fell 15 per cent to 50 cents.
So bond yields, the return an investor realizes by owning a bond, move in the opposite direction of prices.
It will take more than a daily stock market correction to stop the Fed from hiking, said George Goncalves, managing director and head of fixed income strategy at Nomura in NY.
U.S. gold futures settled up $1.9, or 0.16 percent, at $1,193.4. Strong economic data and a positive outlook from Fed officials have led to a sell-off in U.S. Treasury bonds, particularly longer-term ones, sparking concerns about even higher interest rates.
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. Heating oil fell 1.2 per cent to $2.39 a gallon.
The Australian dollar slipped against major currencies, down to 70.7 U.S. cents, 53.6 British pence, 61.4 Euro cents and 79.5 Japanese yen.