The Dow is now more than 11 percent lower than its 52-week high while the S&P 500 is down 12 percent compared its record high. The drops come as investors worry about continuing trade tensions, a court ruling declaring Obamacare unconstitutional, the potential partial government shutdown, the unresolved Brexit issue, and a rising backlash against big tech companies.
The S&P 500 briefly erased its losses in late-morning trade, but the index resumed its steep decline after Jeffrey Gundlach, chief executive of DoubleLine Capital, said that United States stocks were in a bear market.
"The economy is growing without inflation", said Navarro, calling on the Fed not to raise interest rates.
Cryptocurrency, on the other hand, made a bit of a recovery, with bitcoin up more than 8% to about $3,539.33 and Ethereum up more than 10% to $95.09 in the past 24 hours, according to CoinMarketCap data. Oil stocks were particularly hard hit as weak global economic growth drove crude prices down another 2%. The index is 21 percent below the peak it set in August, meaning it's in what Wall Street calls a "bear market".
The US stock market's disgusting year looks set for a particularly nasty ending, with both the S&P 500 and the Dow Jones Industrial Average on track for their worst ends to the year since 1931.
Stock of energy companies fell across the board as oil prices sank more than 7% to a 15-month low on Tuesday.
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U.S. stocks closed higher as investors awaited the central bank's latest decision on interest rate hikes. While consumer discretionary stocks posted the strongest performance, a 2.3% decline in energy stocks kept a lid on the major indexes. On Dec. 17 the S&P 500 ended at a 14-month low.
The Dow lost 507 points, or 2.1 percent, to 23,592.
"I think they shouldn't raise them this week", said Jeffrey Gundlach in an interview Monday with CNBC. The Stoxx Europe 600 Index added 0.2 percent, with autos and banks contributing the most to gains.
The market is in the throes of a slow-growth narrative that is taking over sentiment.
Oil prices dropped $3.66 to $46.22 USA a barrel. Higher rates can slow economic growth and the USA economy is expected to cool off in 2019. Brent crude, used to price worldwide oils, sank 5.6 percent to $56.26 a barrel in London.
Meanwhile, gold stocks were among the few groups to buck the downtrend, resulting in a 2.7 percent jump by the NYSE Arca Gold Bugs Index.