Asian indexes, particularly the Nikkei 225, often follow trends of US markets. Hong Kong's Hang Seng index sank 1.1 percent. So the market's fear of additional rate increases rests on a built-in assumption that the economy will continue to do well overall.
The Dow's 777-point plunge in September 2008 was equivalent to 7 percent, about twice as big as Monday's decline.
And the rout in USA markets continued to ripple around the globe. Most of the experts are not considering it a market crash.
The market hasn't gone through a 10 percent drop since early 2016, when oil prices were plunging as investors anxious about a drop in global growth, which could have sharply reduced demand. "I believe it's just a correction in the market", said Roti. That is painful for Japanese and other regional export manufacturers, whose competitiveness is hurt by stronger currencies that push their prices relatively higher.
Australian shares shed four months of gains in just morning trading, with all sectors losing ground. And if the rate creeps above 3%, he expects global investors to buy the bonds in large numbers, pushing the yield back down.
By late morning Asian time benchmark USA crude had fallen 73 cents to $63.42 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the standard for global oil prices, lost 96 cents, or 1.4 percent, to $67.62 a barrel in London.
"It's like a kid at a child's party who, after an afternoon of cake and ice cream, eats one more cookie and that puts them over the edge", he said.
Buyers charged back in and limited the damage, but at the closing bell the Dow was still down 1,175 points, by far its worst closing point decline on record.
"We all knew there was a correction coming at some point".
The Dow finished down 4.6 per cent at 24,345.75.
The big board dropped more than 1,100 points, or about 4.5 percent.
The STOXX 600 is set for its worst day since the Brexit vote and its worst seven-day fall in two years.
According to Coindesk, the price of bitcoin fell 15 percent to $6,957.
The slump began on Friday as investors anxious that creeping signs of higher inflation and interest rates could derail the USA economy along with the market's record-setting rally.
Investors are anxious that rising inflation might push the Federal Reserve to raise interest rates more quickly, which could slow down economic growth by making it make it more expensive for people and businesses to borrow money.
The analysts are saying that the market is trying to correct itself after a great slump due to overvaluation of stocks in recent days. "There was a big dip last Friday and there's certain points that if the market falls to a certain level, the computer program just automatically says to sell, which is why we saw a very big dip today", said Halverson.
The wild swings Tuesday marked the third day of volatility in global markets. US crude hit a low of about $26 a barrel in February of that year. Part of what makes this week's turbulence so unnerving is that it stands out so much in context; a nearly 5 percent drop in 2009 would have been almost a matter of routine, but today it seems jarring.
Bond prices jumped after a steep decline on Friday. The second reason is that the central banks across the world have given a lot of money as loans on little profit margins.