Wall Street is facing its worst day in eight months, with the Dow Jones index plunging by 832 points.
Investors dumped big-name technology and consumer stocks like Facebook (-4.1pc), Apple (-4.6pc), Amazon (-6.1pc), and Netflix (-8.4pc).
Luxury brands were also casualties of the heavy selling — with Tiffany & Co and Estee Lauder dropping 10.2 and 7.4 per cent respectively.
The retreat from luxury stocks was due to slowing demand from China as its trade war with the United States continues and shows no signs of easing.
On Tuesday, US President Donald Trump repeated his threat to impose tariffs on $US267 billion worth of additional Chinese imports if Beijing retaliates for the recent levies imposed by his administration.
In the background, long-term interest rates for US Treasury bonds have surged to their highest levels since 2011, leading to a dramatic fall in risk appetite for the stock market.
The Dow Jones has dropped by 3.2 per cent to 25,599 points. Over the last week, it's fallen by about 900 points.
The benchmark S&P 500 is down 3.3 per cent to 2,786.
Meanwhile, the tech-heavy Nasdaq has lost 4.1 per cent to 7,422.
It is the biggest sell-off in US markets since February, a negative sentiment also reflected in European markets — with Paris (-2.1pc), Frankfurt (-2.2pc) and London (-1.3pc) finishing deep in the red.
Locally, ASX futures are trading significantly lower, down 97 points (1.6 per cent), which means the heavy selling in foreign markets will extend to the Australian share market when it opens today.
The Australian dollar slipped against major currencies, down to 70.7 US cents, 53.6 British pence, 61.4 Euro cents and 79.5 Japanese yen.
More to come.
