The fall was largely driven by new Federal Reserve Chairman Jerome Powell's unexpectedly hawkish tone on Tuesday where he presented an upbeat picture of the United States economy, opening up the option for more than three rate rises this year as inflation moves "up to target". Britain's FTSE 100 was flat at 7,284.
Asian markets closed mixed: Tokyo's Nikkei added 1.1 per cent, Hong Kong's Hang Seng down 0.7 per cent, and China's Shanghai Composite down1.1 per cent.
About 20 minutes into trading, the Dow Jones Industrial Average had fallen 1.3 percent to 24,280.76, and was on track for its fourth straight loss.
That prompted traders to raise the odds on the Fed squeezing in another rate hike beyond the three already expected this year.
Another potential source of concern will be the latest reading on personal consumption expenditure, the central bank's favored gauge of inflation, which is expected to have increased 0.3 percent on a core-basis in January after a 0.2 percent gain in December. However, as rates climb higher, then earnings are going to have to move higher.
The U.S. 10-year Treasury yields, the benchmark for global borrowing costs, was last at 2.8953 percent after spiking as much as 2.9250 percent on Tuesday.
"The members of the S&P 500 has become quite globalized, and one may argue that most of the things that have benefited this bull market have been globalization-related", Michael O'Rourke, JonesTrading chief market strategist, said by phone. The index had a total of four such days in all of past year.
The disclosure follows a report in the Wall Street Journal that the SEC sent subpoenas to dozens of companies demanding information about initial coin offerings and cryptocurrencies, which aren't bound by the same rigorous rules that govern public offerings of stock. Shares of the company, which sells dental and animal health products, dropped $8.80, or 27.9 per cent, to $22.78. Eastern time. It's still on pace for a loss of 2.5 percent this week, which would be its third decline that severe in the last five weeks. Last year, the worst weekly loss was just 1.4 percent. Brent crude, the global standard, shed 87 cents to $65.76 per barrel.
France's CAC 40 fell 1.1 per cent and Germany's DAX was down 2 per cent.
Gold rose $15.10, or 1.2 percent, to $1,320.30 per ounce.
CURRENCIES: The dollar dipped to 106.74 yen from 107.18 yen late Wednesday. Apple fell 1.75%, still close to record highs.
Equity markets in Paris and Frankfurt were both down more than two percent and the Nikkei in Japan shed 2.5 percent as U.S. trading partners and several leading industry groups criticized Trump's plan.
The Nasdaq futures are down more than 53 points.