The Dow Jones Industrial Average ended at 26,078.62, down 1.9 percent or nearly 500 points, the second day in a row with a loss of more than one percent.
The broad-based S&P 500 dropped 1.8 percent to close at 2,887.61, while the tech-rich Nasdaq Composite Index fell 1.6 percent to 7,785.25.
Payrolls firm ADP estimated the US added 135,000 private-sector jobs in September. The figures were below expectations and bolster anxiety following data Tuesday that showed the weakest manufacturing conditions since the Great Recession.
Other factors behind the drop included fresh worries over a no-deal Brexit after British Prime Minister Boris Johnson’s latest plan drew a tepid response from Brussels and anxiety over potential new US tariffs on Europe following a World Trade Organization ruling on subsidies for Airbus that cleared the US to impose new levies.
Shortly after the market closed Wednesday, senior US trade officials announced new punitive tariffs on the European Union starting October 18.
Analysts also cited a drop in US Treasury yields, often seen as a harbinger of economic slowdown.
Gorilla Trades strategist Ken Berman said the market’s retreat reflects “intensifying recessionary fears,” but added that the ADP jobs report still showed growth in most sectors.
Stock losses were broad-based, with all 11 sectors in the S&P 500 finishing in the red and virtually all the blue-chip Dow index falling.
Airline stocks were especially weak, with Delta Air Lines, United Continental and American Airlines all down more than four percent.
General Motors sank 4.0 percent after third-quarter auto sales missed analyst expectations amid a United Auto Workers strike now in its third week. Fiat Chrysler and Ford also fell following auto sales reports. (AFP)