The distress of the Chinese real estate developer Evergrande and worries about the further development of the economy put a significant strain on the US stock exchanges at the beginning of the week.
The leading index Dow Jones lost 1.8 percent to 33,970 points.
The technology-heavy Nasdaq fell 2.2 percent to 14,713 points, the broad S&P 500 1.7 percent to 4357 points.
Investors are eagerly awaiting the meeting of the US Federal Reserve on Wednesday, from which they expect a signal that the billion-dollar bond purchases will be scaled back.
Fears of a slowing pace of economic recovery hit bank stocks in particular.
The corresponding industry index has meanwhile fallen by around four percent.
The imbalance of the heavily indebted China Evergrande also contributed to this, fueling demand for US government bonds and, in return, depressing yields.
Securities from US banks Morgan Stanley, JPMorgan and Bank of America each fell by around three percent.
"The potential default by the Chinese property developer could have far-reaching and unexpected consequences," said Danni Hewson, financial analyst at AJ Bell.
"This is the X-factor that has the potential that the waves of collapse could spill over into other sectors."
Tax discussions depress buying mood
The S&P 500 is nearing the end of its seven-month winning streak. It is now well away from the record high reached at the beginning of September. The reason for the sell-off is not primarily with Evergrande, even if the situation is serious, emphasized Jamie Cox, Managing Director of the Harris Financial Group. "Rather, the stalemate in the US Congress over the debt ceiling, worries about political changes or mistakes in monetary policy and a whole series of proposed tax increases have clouded investor sentiment."
The problems would only increase, said Sam Stovall, chief investment strategist at analyst firm CFRA Research.
"The persistently rising number of Covid Delta cases, the threat of tapering by the Fed, the possibility of slower than expected economic growth - and now the concern that the failure of Chinese real estate developers could trigger a cascading effect in the financial sector."
The Evergrande turbulence also left its mark on European trading centers.
The EuroStoxx50 went 2.1 percent lower at 4044 meters from the market.
In its first appearance, the Dax lost 2.3 percent to 15,132 points with 40 values.
The VDax and VStoxx indices, which measure the nervousness of investors, rose by around 24 percent each.
The US volatility index even rose by around a third, its highest level in more than four months.
The biggest losers on Wall Street included technology stocks such as Microsoft, Google parent Alphabet, Amazon, Apple, Facebook and Tesla.
The shares gave between 1.5 and four percent.
Car manufacturers like GM and Ford, which lost up to 5.4 percent, were also under pressure.
The US Department of Transportation is investigating 30 million US vehicles for potentially defective airbags.
The investigation affects almost two dozen car manufacturers, including BMW, Porsche and Daimler.
Papers of the US airlines United, Delta and American rose by up to three percent.
The background to this is the announcement of the lifting of US entry bans for vaccinated passengers from 33 countries, including Germany.