The Standard & Poor's 500 index, the benchmark most professional investors and many index funds use, skidded 113.19 points, or 4.1 percent, to 2,648.94.
Neil Wilson, senior market analyst at ETX Capital in London, is anxious about the role technology is playing in the rout.
He said that after a rough start Tuesday, it was "an encouraging sign to see buyers stepping in at the close rather than selling off like we saw on Monday".
The market had been enjoying a dizzying ascent since President Trump was elected in November 2016, with the Dow gaining 45% through its record closing high on January 26, 2018.
As a result, he thinks that it's entirely possible that this has led to some "complacency", with investors perhaps "getting a little ahead of themselves".
Wall Street stocks finished with solid gains on Tuesday (Feb 6) after a rollercoaster session, winning back a good portion of the losses from the prior session's rout.
In corporate news, shares of Snap Inc. spiked 47.58 percent to 20.75 US dollars apiece after the social network delivered better-than-expected quarterly results late Tuesday.
Meanwhile, in Egypt, one of the largest consumer markets in the region, the EGX30 was trading 2 percent lower and the EGX50 was down 3 percent.
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TOKYO: Asian stocks also couldn't escape the market turmoil as a global market rout intensified, fuelled by worries that a build-up in inflationary pressures will prompt major central banks to raise interest rates faster than expected.
The Dow closed at 24,912.77 Tuesday afternoon, gaining 567 points after losing over 500 points at the opening bell. Don't try to buy or sell just because the markets are up or down.
Markets began taking a turn for the worse last week following strong United States wage growth, which fuelled speculation that USA interest rates might start to rise more quickly to cool inflation. A drop of 10 percent from a peak is referred to on Wall Street as a "correction".
European markets are rebounding this after two days of wild swings, but investors are still nervous.
European shares remained lower, while losses for MSCI's widely tracked 47-country world index broke $4 trillion.
Ric Spooner, chief markets analyst at stock broker CMC Markets, said that he's keeping an eye on the "real economy" to figure out where stocks are headed.
Despite the sea of red in global stock markets, there are hopes that the retreat won't last long given that global economic growth has picked up and the financial system is more robust since the financial crisis. The yields on 10-year Treasury bills stood at 2.779 percent, below recent highs, and corporate bond rates held steady Monday, suggesting that a stampede out of stocks is not imminent. It was a similar story on Germany's DAX, which was 3 percent lower at 12,308.
Anxiety that inflation is accelerating due to bigger paychecks propelled benchmark 10-year yields to a four-year high at 2.88 percent.
The highest bond yields in years are making bonds more appealing to investors compared with stocks. On Friday, Dow Jones and S&P 500 reported their worst weekly performance in two years.
Elsewhere in Asia on Wednesday, Hong Kong's Hang Seng climbed 2.8%, while Australia's S&P/ASX 200 rose 1.3%, and South Korea Kospi index held steady.
Generally, stock market watchers appear bullish on US equities as market fundamentals including unemployment, company earnings, and GDP both in the USA and globally remain strong.
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