Thursday's fall in the Dow Jones brings the losses to 10% over two weeks
Stock markets in Asia are continuing to drop significantly after a volatile week on Wall Street.
Shanghai stocks plunged more than 5% on Friday morning, while Japan's Nikkei Index fell 3.2% and the Hang Seng in Hong Kong dropped 4.3%.
The plummeting numbers come after the Dow Jones Industrial Average experienced its second worst fall in history on Thursday.
It closed with a loss of 1,032 points - a fall surpassed only by one of 1,175 witnessed on Monday.
The drop was equal to 4.15%, bringing the losses from a record high reached two weeks ago to 10%.
That puts the markets into what's known as a "correction" phase - the term in Wall Street for a drop of more than a tenth.
In London, the FTSE 100 had also experienced a sharp fall on Thursday - dropping by 109 points, or 1.5%, after the Bank of England signalled interest rates were likely to rise earlier and more sharply than previously thought.
Despite the dramatic falls, analysts have been cautious in their interpretation of the market moves, pointing out that corrections of this kind are normal and that global markets are still at historically high levels.
Of 10 corrections in the last 20 years, only two have turned into the extended, and more marked, downturns known as bear markets.
The US stock market began its current wobble last Friday after a strong wages and jobs figures suggested inflation could increase and the Federal Reserve Bank might raise interest rates too quickly.
Scott Wren, senior global equity strategist for Wells Fargo Investment Institute, said: "Far and away the most important things are the fear that the Fed is going to make a mistake, and higher wages are going to cut into margins."
The figures also sparked a spike in bond yields, seen as hurting equities as they increase borrowing costs and reduce the appetite for risk.
In Asia, analysts are preparing for extended falls but it is unclear exactly what the near future might hold.
"The correction phase in equities could last through February and possibly into March," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management in Tokyo.
"The rise in long-term US yields will have to settle for the correction phase to end. The surge in volatility has also prompted investors to sell risk assets, in turn feeding more volatility."