Equities on both sides of the Atlantic dropped, along with oil, after a report showed Germany's industrial output slumped more than expected in August, while the International Monetary Fund downgraded its forecasts for the global economy.
The euro-zone's engine economy is spluttering. A government report showed German production, adjusted for seasonal swings, sank 4 per cent in August, after increasing 1.6 per cent in July. August's drop was the biggest in more than five years, and came a day after another government report showed the country's industrial orders suffered their largest monthly slide in five years as well.
"The number was very weak, which makes for a tough backdrop. I don't think this is a trend of something that will get horrible, but it is weak and current valuations demand that data be better than weak," Hayes Miller, the Boston-based head of asset allocation in North America at Baring Asset Management, told Reuters.
The euro dropped as much as 0.6 per cent to US$1.2584 after the report, before recovering to US$1.2654.
In late afternoon trading in New York, the Dow Jones Industrial Average dropped 0.73 per cent, the Standard & Poor's 500 Index slid 0.70 per cent, while the Nasdaq Composite Index shed 0.78 per cent.