Though the S&P 500 is just an inch away from a fresh record, it has gained only about 2.3% over the past year and hasn't moved much from its levels in January 2018.
Adding to the chaos was news the World Trade Organization (WTO) has backed a U.S. request to impose tariffs on US$7.5 billion of European goods due to the EU subsidies which were previously handed to aircraft manufacturer Airbus, potentially sparking yet another escalation in President Trump's trade wars.
Stocks tumbled again as investors became more anxious that worsening trade tensions and other factors could further weaken the global economy and more in Wednesday's Stock Market Update.
"There's concern that maybe the United States economy isn't the island of strength it would be", Delwiche said.
The Nasdaq Composite Index dropped 1.6%, while the Dow Jones Industrial Average slid 1.9%.
Elsewhere, the 10-year US Treasury yield tumbled, falling below 1.59%.
A mix of growing economic concerns, escalating trade tensions and the opening of an impeachment inquiry against President Donald Trump is making October a spooky month so far for investors.
The Dow Jones Industrial Average sank 525 points Wednesday, or 2%, to 26,044.
Remnants of Hurricane Lorenzo to bring buckets of rain to NL Friday
Now to the southwest of the Azores, Lorenzo is the strongest hurricane to have been recorded so far east in the Atlantic. It looks set to be dry at first on Friday night but outbreaks of rain will move in from the southwest later.
SECTORS: Technology stocks notched gains, led by software maker Microsoft and chipmaker Nvidia.
PepsiCo Inc rose 2% in premarket trading after the company beat quarterly expectations as higher advertising and new low-calorie versions of Gatorade boosted demand for its beverages in North America.
OVERSEAS: Stocks in Europe and Asia fell broadly as the global prospects for economic growth dim amid trade uncertainty.
The Cboe Volatility Index, or VIX, an options-based gauge of investor anxiety, rose 2.06 points to 20.62, its highest in about a month. Most of the movement in the market was very slight last month, despite that month's reputation for large swings, said Ryan Detrick, senior market strategist for LPL Financial, in a note.
Another key indicator due this week is Thursday's report on the services sector. Expectations for a quarter-percentage-point interest-rate cut by the Federal Reserve jumped above 90%, compared to 77% on Wednesday and less than 50% last week, according to the CME FedWatch Tool.
Still, many investors remain on edge that slowing growth around the world could weigh on the domestic economy.
But stocks rallied back, recovering their losses by midday, as investors' hopes of a Fed rate cut increased dramatically.
The Fed is scheduled to meet at the end of the month. The solid forecast followed surprisingly good third quarter profit and revenue.