Alec Young, managing director of global markets research at FTSE Russell, said investors fear that rising interest rates and growing expenses are going to erode the boost company profits have gotten from the GOP tax overhaul.
The broad-based S&P 500 slumped 3.3 percent to end at 2,786.46, while the tech-rich Nasdaq Composite Index plummeted 4.0 percent to finish the session at 7,427.74. 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.
The sharp decline in stocks was led by a fall in shares across several of the world's largest technology giants. Boeing lost 4 per cent to $370.04 and Alphabet, Google's parent company, gave up 3.2 per cent to $1,109.08.
Investors were concerned that the Federal Reserve will continue to raise interest rates and that this will slow economic growth and make borrowing more expensive for the US government, as well as businesses and consumers. With a humming USA economy, the Federal Reserve is expected to continue hiking interest rates. "I think the Fed has gone insane", he charged.
The technology-heavy Nasdaq composite dropped 4.1% to 7,422 points, its biggest loss since February 8. Investors see many of these countries as being vulnerable to higher USA interest rates, which can pull away investment dollars.
International Monetary Fund predicts India will grow at 7.3% in 2018-’19
If the trade war continues, it could take a significant bite out of global growth, according to the fund. However, the RBI pegged India's growth projections at 7.5 per cent.
The two-year yield soared to its highest mark since 2008.
Tech is taking its lumps because bond yields have climbed in recent weeks, hovering at a more-than-seven-year high. Heating oil fell 1.2 percent to $2.39 a gallon.
All three indexes hit records between August 30 and October 3, despite the escalating Sino-US trade dispute gnawing at confidence on corporate profit growth through most of the year. Technology companies and retailers, including longtime market favorites Apple, Alphabet and Amazon, continue to slide. Over the past two days, it has lost more than 1,300 points. Those stocks have made huge gains for years, but they're now out of favor.
Oil prices fell more than 2 percent as U.S. stocks plunged, even though energy traders anxious about shrinking supply from Iran due to U.S. sanctions and kept an eye on Hurricane Michael, which closed almost 40 percent of U.S. Gulf of Mexico output.
Taylor Swift, Cardi B set for American Music Awards
Elsewhere, Swift was not the only major celebrity to perform, with both Mariah Carey and Jennifer Lopez taking to the stage. Late rapper, XXXTentacion, who was shot and killed in June aged 20 , won a posthumous award.
The S&P 500 posted no new 52-week highs and 62 new lows; the Nasdaq Composite recorded 6 new highs and 291 new lows.
In other metals trading, silver rose 2 percent and copper added 0.8 percent.
Mona Mahajan, US investment strategist at Allianz Global Investors, said: "The market is digesting the potential that rates moving upwards eventually seep into the real economy in the form of mortgage rates, auto rates, student lending rates".
The dollar fell to 111.98 yen from 112.59 yen, and the euro rose to $1.1593 from $1.1525.
Missing Saudi journalist sparks backlash from US
And by mid afternoon on Sunday, no Turkish official had publicly accused Saudi Arabia of killing Khashoggi. Turkey's Anadolu news agency also reported a group of Saudis were briefly at the consulate.