Numerous biggest United States names fell hard in Wednesday's session, with Apple, Boeing and Facebook all slumping more than four percent and Amazon, Nike and Microsoft shedding more than five percent. "I think the Fed has gone insane".
China Mobile shares fell 3.7%, insurance group Ping An dropped 4.1% and China Construction Bank lodged a slide of 3.2%. Officials expect to hike rates another quarter percentage-point by the end of this year and gradually continue to raise rates at least through 2019.
The rout in United States shares followed substantial losses on European bourses, due in part to tensions between Brussels and Rome over Italian budget plans that have revived fears about the eurozone. The Nasdaq fell 315 points, or 4.1 percent, to 7,422.
"The selling is not panicking but it's persistent", Briefing.com analyst Patrick O'Hare said of the proceedings. "It's all about investors rethinking their exposure to stocks".
Fed Chairman Jerome Powell is aiming to extend the second-longest US economic expansion on record by moving interest rates up just quickly enough to prevent overheating, but not so rapidly that the central bank chokes off growth.
Stocks are in the midst of a scary October slump, sliding sharply because investors are anxious about rising interest rates.
Last week's jump in yields followed strong USA data but many analysts have been anticipating a change in the dynamics in the bond market due to expectations that central banks in Europe and Japan will soon phase out bond-buying programmes.
Ivan Feinseth, Chief Investment Officer at Tigress Financial Partners, said that although the sell-off caught him off-guard, he thought many investors were unduly frightened by the prospect of rising rates. And tech stocks got hit particularly hard.
Earlier on Tuesday, White House economist Kevin Hassett said the administration respects the Fed's independence and pointed to Trump's nominees to the central bank as evidence of its non-partisan approach to the setting of monetary policy. The 10 year U.S. Treasury, a key benchmark for rates, has been spiking and is now at 3.2 percent, one of its highest levels since just after the Great Recession. In Paris, shares in Kering fell almost 10 percent, LVMH over seven percent and Hermes around five percent.
In other markets, oil prices fell on worries that Hurricane Michael will dent demand for gasoline and other petroleum products.