Global stocks went into a tailspin as investors despaired over economic growth after grim economic data from China and Germany.
Britain's FTSE 100 sank 4.6 per cent, France's CAC 40 4.8 per cent and Germany's DAX 4.3 per cent. Japan's Nikkei fell 2.1 per cent, while Hong Kong's Hang Seng lost 4.9 per cent.
Dow stock futures lost 227 points, or 2.1 per cent, while S&P 500 futures fell 26.10 points, or 2.3 per cent, to 1,129.70, about two and a half hours before U.S. markets opened.
Copper plunged more than 5 per cent, below $8,000 (U.S.) a tonne, to its lowest level in a year.
Miners came under severe pressure, with the European sector index falling 6.2 per cent, tracking a drop of 3.4 to 4.9 per cent in key base metals on growing worries about demand for industrial metals in a deteriorating economic environment.
Fuelling the sell-off was news that China's manufacturing sector contracted for a third consecutive month in September while inflation picked up, suggesting the world's No.2 economy may not be able to provide much of a counterweight to flagging U.S. and European growth.
Business activity in Germany grew at its weakest pace in more than two years in September and new orders fell for a third month, a survey showed, underscoring a loss of momentum in Europe's largest economy at a critical time for the euro zone.
The U.S. Federal Reserve's tacit acknowledgment that America's economic slowdown is likely to persist for quite a while also sent global investors fleeing for cover.
The Canadian dollar slid to 97.03 U.S. cents and the euro slipped 0.7 per cent to $1.3486 (U.S.) as the greenback attracted buyers seeking a haven in times of financial turbulence.
Benchmark oil fell $3.00 in electronic trading on the New York Mercantile Exchange to $82.92.
The 30-year German benchmark yield fell to 2.538 per cent, passing the previous lows seen in late August 2010.
Yields on 10-year U.S. Treasuries were down to just above 1.8 per cent.
Gold, another traditional haven, slipped as the U.S. dollar picked up steam. It lost 3 per cent, trading at $1,754.80 an ounce.