President Trump renewed his criticism of the Federal Reserve last night, saying that the central bank was raising interest rates "too fast". "I think the Fed is making a mistake", he said before a rally with his supporters in Erie, Pa. "They're so tight." He noted of today's market, "It's a correction that we've been waiting for, for a long time". A stock market correction is defined as a decline of at least 10 percent from the high point of the past 52 weeks, suggesting that major USA indices have further to fall.
Taiwan plunged almost 6%, with Seoul down 3% and Sydney and Singapore both falling 2% after US Donald Trump said the Federal Reserve had "gone crazy" with plans for higher interest rates.
The tech-rich Nasdaq Composite Index plummeted 4.1 percent to finish the session at 7,422.05, its worst fall in percentage terms since the surprise Brexit vote in June 2016.
The White House said Wednesday that the "fundamentals and future" of the US economy are "incredibly strong" despite the big losses in the stock market. "That suggests the Fed will keep raising rates, and that's taking the wind out of the stocks that have done the most, particularly in the tech sector".
On Wednesday, the Dow fell 831 points, or 3.1 percent, to 25,598.
Stocks have sold off in recent days on worries about higher borrowing costs.
The Fed last raised interest rates in September and left intact its plans to steadily tighten monetary policy, as it forecast that the USA economy would enjoy at least three more years of economic growth.
The markets have been on a historic climb - with the Dow and S&P each notching dozens of new highs since 2016 - buoyed by a strong USA economy and solid corporate earnings.
"It's shifting the tectonic plates", said Jack Ablin, chief investment officer at Cresset Wealth Advisors. Netflix was down more than 8 percent, Amazon was off 6 percent and Apple and Google were both down more than 4.5 percent.
The turmoil on stock markets came a day after the International Monetary Fund slashed its global growth forecast on worries about trade wars and weakness in emerging markets.
In Europe this week, the closely-watched spread between the rates on 10-year bonds in Italy compared with those offered by Germany, which is a measure of the added risk perceived by investors to holding onto Italian debt, hit the highest level since April 2013. In Paris, shares in Kering fell almost 10 percent, LVMH over seven percent and Hermes around five percent.