The Dow Jones Industrial Average dropped 1.1 per cent, the Standard & Poor's 500 Index shed 1.6 per cent, while the Nasdaq Composite Index slid 1.8 per cent. Trading on the New York Stock Exchange resumed in late afternoon after the NYSE was forced to shut down its main market for more than three hours because of a computer malfunction. It was a technical glitch.
Slides in shares of Caterpillar and those of American Express, last trading 2.4 per cent and 2.2 per cent lower respectively, dragged the Dow down.
Minutes from last month's Federal Open Market Committee meeting showed policy makers share investors' concerns on China, as well as on Greece, which officially restarted negotiations with its international creditors by asking for a new bailout.
"Several mentioned their uncertainty about whether Greece and its official creditors would reach an agreement and about the likely pace of economic growth abroad, particularly in China and other emerging market economies," the minutes from the June 16-17 meeting showed.
Most policy makers did not think a hike in US interest rates was warranted yet.
"Most participants judged that the conditions for policy firming had not yet been achieved; a number of them cautioned against a premature decision," the minutes showed. "Many participants [needed] additional information indicating that economic growth was strengthening, that labour market conditions were continuing to improve, and that inflation was moving back toward the Committee's objective."
Investors will scrutinise Friday's speech by Fed Chair Janet Yellen, who is also set to deliver her semi-annual testimony to Congress next week.
Europe's Stoxx 600 Index ended the day marginally higher from the previous close, up just under 0.1 per cent. Germany's DAX gained 0.7 per cent, while France's CAC 40 Index climbed 0.8 per cent, and the UK's FTSE 100 Index rose 0.9 per cent.
Greece formally requested a three-year loan.
"I want to inform you that the last chance procedure has just started," European Council President Donald Tusk told the European Parliament. "[Eurogroup] President [Jeroen] Dijsselbloem has received, while we are debating here, the formal Greek request for the ESM programme, as we agreed [on Tuesday]."
Oil dropped, after the US Energy Information Administration unexpectedly said inventories rose last week for crude, petrol and distillates.
"We were not supposed to be building crude inventories in early July," David Thompson, executive vice-president at Powerhouse, an energy-specialised
