S. stocks plunged in highly volatile trading on Monday, with the Dow industrials falling almost 1,600 points during the session, its biggest intraday decline in history, as investors grappled with rising bond yields and potentially higher inflation.
On its way there, the Dow took several harrowing turns during the day, opening with a plunge of 567 points - coincidentally, the exact same amount it wound up gaining at the closing bell.
The Stoxx 600 index, which tracks Europe's largest companies, fell by more than 2 percent in the first hour and Frankfurt's Xetra Dax 30 sunk 3.5 percent. By Tuesday, it was once again slightly higher for 2018.
"Selling accelerated as Dow futures extended declines during Tokyo trading hours and concerns grew that US equities will continue to fall tonight", Makoto Sengoku, a market analyst at the Tokai Tokyo Research Institute, was quoted as saying.
The TOPIX index of all first-section issues closed down 80.33 points, or 4.40 percent, at 1,743.41, after shedding 40.46 points the previous trading day.
Sharp drops on Friday and Monday erased the gains the Dow and S&P 500 made this year.
The Tokyo market accelerated its downswing in the afternoon as market players stepped up selling to avoid further losses, with the Nikkei briefly giving up over 1,600 points.
By early afternoon in Asia, Dow and S&P futures were both down more than 4 percent, suggesting a weak open for US markets.
Yoshinori Shigemi, market strategist at JPMorgan Asset Management, said the spectre of inflation will gradually undermine the attraction of equities even though the markets could rebound in the short term.
He did keep an eye on the market's performance during his congressional testimony Tuesday morning.
The slide Monday brought the Dow back below 24,000 points.
"The speed at which we are doing it is not normal", said Michael Purves, chief global strategist at Weeden & Co in NY. I think we are pretty close to a selling climax here.
US stocks went on another bumpy ride on Wall Street, dropping sharply in early trading before recovering their losses by lunch time.
By midday it was up 30 points, or 0.2 percent, at 24,395.
Dublin's ISEQ index had also opened sharply lower, falling by 3.3%. The Nasdaq composite was little changed at 6,968. Australian shares dropped 3.0 per cent to their lowest level since October while South Korean shares dropped 2.0 per cent.
The wild swings Tuesday marked the third day of volatility in global markets.
Concerns were reignited that higher inflation in the USA will lead to a hike in interest rates which would harm markets reliant on the central bank's stimulus measures.
Other banks also fell. Among other blue chips, SoftBank Group tumbled 5.1% and Fanuc Manufacturing lost 4.7%.
The benchmark S&P 500 slumped 4.1 percent and the Dow 4.6 percent, suffering their biggest percentage drops since August 2011 as a long-awaited pullback from record highs deepened.