The losses in the US followed declines in Asia and Europe earlier in the day and comes as yields on the benchmark 10-year Treasury fell six basis points to about 2.33%, the lowest level in about a year and a half, sending prices higher.
"Tariffs/trade war, Brexit, debt ceiling, interest rates/inverted yield curve, and slowing global growth are all weighing down investor sentiment and will continue to cloud the near-term picture," analyst Dan Wantrobski said in a Janney Montgomery Scott technical strategy note.
Tensions between the US and China have been growing this month amid talks between the countries that came as the White House raised tariffs on $200 billion of imports from the Asian nation to 25% from 10% previously.
Oil futures plunged, with US benchmark West Texas Intermediate sliding 5.3% to $58.14 a barrel while Brent, the international standard, shed 4.9% to $67.53 a barrel. Chevron (CVX) sank 2.5% in one of the steepest decreases on the Dow Jones Industrial Average, while Exxon Mobil (XOM) was down 2.2%. Hess (HES) dropped 8.1% and Devon Energy (DVN) lost 5.1%.
The energy group was down 3.4% in the biggest retreat on the Standard & Poor's 500, while information technology fell 2% and industrial were down 1.9%. Haven sector utilities was up 0.3% while real estate was slightly stronger.
In company news, L Brands (LB) jumped 16% after the Victoria's Secret parent reported late Wednesday better-than-expected fiscal first-quarter results. Copart (CPRT) climbed 8.2% after vehicle-auction company's fiscal third-quarter earnings and revenue beat analysts' views.
Chinese social media company Weibo (WB) sank 13% after offering second-quarter revenue guidance that was below analysts' expectations. NetApp (NTAP) also shed 13% after its fiscal fourth-quarter results came in below views.
In late morning trading, the Nasdaq was down 1.2% while the Dow and the S&P 500 both fell 1.1%. Globally, the FTSE 100 shed 1.4%, the Hang Seng fell 1.6%, the Shanghai Composite was down 1.4% and the Nikkei 225 was off by 0.6%.
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