US share prices tumbled at the start of trading as investors fled riskier assets on fears about a trade war and the impact on the global economy.
India, Thailand and New Zealand cut interest rates overnight, prompting a fresh Twitter attack on the US Federal Reserve by President Donald Trump.
The uncertainty sparked another fall in the oil price, down more than 3%.
Gold briefly topped $1,500 an ounce, a price not seen since April 2013, as demand for haven assets rose.
About an hour into trading, the three major Wall Street markets were down about 1.5%, with the Dow Jones index dropping 2% earlier.
Mr Trump again lashed out at the US central bank, demanding more economic stimulus as the 2020 presidential elections approach, and accusing the Federal Reserve of posing more of a threat than China.
He tweeted: “Our problem is a Federal Reserve that is too….. proud to admit their mistake of acting too fast and tightening too much (and that I was right!).”
And speaking to reporters at the White House later, he brushed off concerns about falling share prices.
“I would have maybe anticipated even more” market reaction. “Ultimately it will go much higher than it ever would have gone because China was like an anchor on us.”
His comments come amid growing fears that trade tensions between the US and China could deepen over the next few months. Weak industrial output data from Germany, Europe’s biggest economy, also unsettled investors.
“(Markets) are moving lower on global growth concerns. And coming into question is the broader fundamental strength of economies around the world, ” said Mike Loewengart, vice president of investment strategy, at E-Trade Financial.
Peter Cardillo, chief market economist at Spartan Capital Securities, added: “It’s all about the fear factor over the trade war and the impact of the trade war on growth.
“Things are just falling out of bed. You have gold soaring this morning. Obviously, investors are running for safety.”