Asian markets followed the US stock market with Japanese stocks suffering their biggest point drop since June 2016 on Tuesday, after Wall Street tumbled the previous day on fears about rising U.S. bond yields and a potential pick-up in inflation.
With all eyes now on Europe the big three, London, Frankfurt and Paris all fell sharply when they opened on Tuesday with new losses of up to 3%.
In the US overnight, the Dow lost 4.6%.
US stocks suffer worst fall in six years, with all gains from the last year wiped out yesterday afternoon.
The Dow has dropped by a record 1,175 points, the leading US stock market index closed down 4.6% at 24,345.75., smashing the previous record when it fell by 777.68 points during the financial crisis in 2008.
According to the BBC, The stock market sell-off accelerated on Friday and continued Monday when the US Labour Department released employment numbers which showed stronger growth in wages than was anticipated.
If salaries rise, the expectation is that people will spend more and push inflation higher.
Earlier in the day, the Dow had plummeted by nearly 1,600 points before recovering much of that value.
It has swung some 2,100 points in the last week of trading, a slide approaching 8 percent.
In addition to the Dow shedding value, the Standards and Poor 500 (S&P 500) index and the Nasdaq both saw declines of around 4 percent.
The S&P 500 declined to about 7.8 percent below its all-time high.