Global stocks have posted big declines as fresh concerns surfaced that Greece may not meet its deadline for a debt restructuring.
Worries about slowing economic growth in China, Europe and Brazil also weighed on sentiment.
Wall Street stocks posted their biggest losses in three months, with the Dow dropping more than 200 points for the first time since November.
The Dow Jones Index closed down 203 points (1.6%) to 12,760.
The Nasdaq Composite closed down 40 points (1.4%) to at 2910.
In Europe, shares hit a one-month closing low on Tuesday.
Euro zone banks, which own a large share of the area's sovereign debt and are poised to suffer from a weak economy, and the auto sector which depends heavily on the global economy, were among the biggest decliners, Reuters reports.
The FTSEurofirst 300 index of top European shares closed down 2.6% at 1,052.11, its lowest since 1 February.
Pension funds decide on bond exchange
Meanwhile, most Greek pension funds holding Greek sovereign debt have agreed to take part in a bond exchange to ease the country's debt burden.
However a Greek official said four funds - for journalists, police, the self-employed and hotel workers - which hold Greek debt worth €2 billion - have refused.
The pension funds have come under pressure from workers' unions worried the writedown on Greek debt holdings will affect the viability of their funds. About eight or nine funds have agreed to take part.