Dow Industrial Average Futures were down by about 300 points, or 1.2 percent, in pre-market trading, implying a sharply lower opening on Thursday after falling more than 3 percent on Wednesday. The International Monetary Fund cut its outlook for global growth this week, citing interest rates and trade tensions.
Tech stocks in the S&P 500 fell 2.7 percent Wednesday for the steepest loss among the 11 sectors that make up the index.
All 30 Dow stocks were in the red, sending the index below 26,000 points for the first time in a month.
The sharp decline in stocks was led by a fall in shares across several of the world's largest technology giants. Amazon and Alphabet, respectively the second- and fourth-most valuable USA companies, are in what's known as a "correction", a drop of more than 10 percent from a recent peak.
The increase in yields from these bonds - which are parcels of U.S. government debt - can hurt stocks since they will provide competition for investors' cash. "I think the Fed has gone insane", he charged.
Bank shares were boosted as yields rose, with Citigroup and Bank of America seeing gains of 0.4 percent and 0.3 percent, respectively. Those higher rates have been the catalyst for recent selling, stoking concerns that slower growth would impinge on corporate profits.
The Dow ended down 831 points, or 3.1%, at 25,598.
The Nasdaq composite, which has a high concentration of technology companies, suffered its biggest loss in more than two years and has dropped nearly 8 percent since the start of October.
Although the yield on the 10-year Treasury declined toward the end of the day, its jump from 3.05 percent early last week to more than 3.20 percent - a seven-year high - has spooked investors. Amazon, Apple, Alphabet and Facebook all fell by between 2.3pc and 3.9pc.
Asia stock indexes added to the global market's pain on Thursday, with benchmarks in Shanghai, Shenzhen and Tokyo all skidding between 4 and 5 percent.
USA stocks notched solid gains in the third quarter as investors brushed aside worries about trade wars and focused on strong corporate earnings and solid U.S. economic data. It pushed the two-day loss to almost 1,400 points. JPMorgan Chase and several other banks will report their third-quarter results Friday morning. Microsoft and Alphabet, Google's parent company, were little changed. Chip gear producers Applied Materials, Teradyne and ASML Holdings fell between 3.5 percent and 4.6 percent. The Nasdaq composite rose less than a point to 7,422.
The Producer Price Index increased 0.2% in September and reported a 2.6% annual increase.
Wholesale gasoline lost 4.3 percent to $1.93 a gallon.
"The market is starting to believe the Federal Reserve a bit more and starting to price [rate hikes] in", Mona Mahajan, US investment strategist at Allianz Global Investors, told The Post.
The dollar slipped to 112.17 Japanese yen from 112.27 yen late Wednesday.