Wall Street lost ground as a sell-off accelerated late on Monday after another volatile session.
The Dow Jones Industrial Average fell 208.44 points (2.49%) to 8,170.51.
The Nasdaq composite fell 46.13 points (2.97%) to 1,505.90.
Standard & Poor's 500 index lost 27.83 points (3.17%) to 848.94.
Trading was low on the New York Stock Exchange, with aout 1.34 billion shares changing hands - last year's estimated daily average was roughly 1.90 billion. About 2.27 billion shares were traded on the Nasdaq - last year's daily average was 2.17 billion.
Canada's main stock exchange also dropped. The Toronto Stock Exchange dropped 756.38 points, or 8.14%, to 8,537.34 - its lowest level in four years.
The Canadian dollar fell 0.97 cents to US77.59 cents - its lowest level in four years.
European shares also fell. The FTSEurofirst 300 index of top European shares closed down 1.6% at 816.04 points - its lowest close since May 2003.
In Britain, the FTSE was down 1%; in France, the CAC 40 was down 4%, and in Germany, the DAX was up 0.9%.
Shares in Tokyo fell to a 26-year low on Monday.
The Nikkei average was down by 6.36% as the yen rose on the dollar. The Nikkei was down 486.18 points to close at 7,162.90 - its lowest close since October 1982.
In Hong Kong, shares plunged 12.7%. The Hang Seng Index closed down 1,602.54 points at 11,015.84 - its lowest level since mid-2004.
Markets in Taiwan, Hong Kong and Shanghai fell by over 4% each and stocks in India lost 3.8%.
Trading was briefly halted in the Philippines after the market fell 10%. Singapore was closed for a holiday.
South Korean shares posted a gain after an emergency rate cut by the central bank. The KOSPI ended up 0.8% after earlier dropping as much as 5%.
In Australia, the S&P/ASX 200 index lost 60.2 points to close at 3,809.2 - its lowest close since 29 October, 2004.
The All Ordinaries index shed 63.3 points, or 1.65%, to 3,768.3 - its lowest close since 27 October, 2004.
On the Sydney Futures Exchange, the December share price index futures contract was 111 points lower at 3,766 on a volume of 35,977 contracts.
NZ market closed
The New Zealand market was closed on Monday for the Labour Day holiday.
The NZX 50 index lost 28 points on Friday to close at 2778 on light turnover of $48 million.