NEW YORK -- A global stock market downturn worsened Thursday as investors, spooked by a plethora of economic worries, dumped shares that suddenly looked dangerously overvalued.
The extent of European equity falls almost matched the previous day's tumble at the close, while Wall Street followed up its worst session since February with another bruising rout.
Earlier, Asian equity markets also suffered heavy losses.
"Global sentiment remains skittish amid the recent rise in global bond yields, led by Treasuries, as well as concerns about the Fed tightening policy too much despite rising risks," said Charles Schwab analysts.
The declines -- which brought major US indices to their lowest levels in months -- came as President Donald Trump repeatedly castigated the Federal Reserve for lifting interest rates, sparking worry that the US central bank's independence from politics could be compromised.
In the end, Frankfurt, Paris and London all lost at least 1.5 percent, while Tokyo slumped 3.9 percent and Shanghai 5.2 percent.
The Dow's drop of 2.1 percent, or 545 points to 25,052.83, took its losses for the week to more than five percent.
The volatility was not limited to the equity market. Brent oil prices slid 3.4 percent to $80.26 per barrel after OPEC cut its forecast for global oil demand and data showed a big build in US oil supplies.
Some stock market watchers had predicted a bounce on Thursday after Wednesday's pullback, Wall Street's worst day since February.
"When we have a recalibration in values, it's not surprising that it takes more than one day," said Art Hogan, chief market strategist at B. Riley FBR. "In these kinds of moves, it usually takes three days to wash out."
Most market viewers saw last week's surge in the yield of the 10-year US Treasury bond as the catalyst for the two-day rout in the US, an unexpectedly fast move higher that raised worries about a sudden acceleration of inflation and more aggressive Federal Reserve interest rate hikes.
Other factors that have given investors cause for worry have included uncertainty about emerging markets, slowing Chinese growth and an emerging fight between Italy and Brussels over budgets.
Analysts are hopeful that upcoming third-quarter earnings season could be a catalyst that rallies the market. Earnings season begins in earnest on Friday with results from JPMorgan Chase and other large banks.
But Hogan said earnings were also a source of worry because they could showcase the consequences of Trump's trade wars for US companies, from raising costs of raw materials to forcing enterprises to change supply chains.
"The larger concerns we have are about what companies have to say about the US and China," Hogan said. "I think there's less of a belief that we're getting close to a resolution with China."
KEY FIGURES AROUND 2100 GMT (5 a.m. Friday in Manila)
New York - Dow Jones: DOWN 2.1 percent at 25,052.83 (close)
New York - S&P 500: DOWN 2.1 percent at 2,728.37 (close)
New York - Nasdaq: DOWN 1.3 percent at 7,329.06 (close)
London - FTSE 100: DOWN 1.9 percent at 7,006.93 (close)
Paris - CAC 40: DOWN 1.9 percent at 5,106.37 (close)
Frankfurt - DAX 30: DOWN 1.5 percent at 11,539.35 (close)
EURO STOXX 50: DOWN 1.8 percent at 3,209.19 (close)
Hong Kong - Hang Seng: DOWN 3.5 percent at 25,266.37 (close)
Shanghai - Composite: DOWN 5.2 percent at 2,583.46 (close)
Tokyo - Nikkei 225: DOWN 3.9 percent at 22,590.86 (close)
Euro/dollar: UP at $1.1595 from $1.1520 at 2100 GMT on Wednesday
Pound/dollar: UP at $1.3236 from $1.3197
Dollar/yen: DOWN at 112.07 from 112.27 yen
Oil - Brent Crude: DOWN $2.83 at $80.26 per barrel
Oil - West Texas Intermediate: DOWN $2.20 at $70.97 per barrel
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