The S&P 500 index fell 70 points, or 2.6 percent, to 2,634.
There have also been disappointing quarterly earnings from several big-name companies, worldwide condemnation of Saudi Arabia - a major oil producer - over the killing of journalist Jamal Khashoggi, and concerns that the US-China trade war is causing the global economy to slow down. Technology and consumer-focused companies accounted for much of the sell-off. Media and communications stocks, health care companies and banks also took heavy losses.
The Dow Jones Industrial Average lost more 2.4 percent, losing more than 600 points to end at 24,583.42.
Bond prices rose, sending yields lower. The ups and downs came during the busiest week for third-quarter company earnings.
Yet, he said, "you can't look at it blindly and say earnings are turning the market around and we're all clear". "That's causing some of this volatility".
The Nasdaq slid 281.81 points, or 3.8 percent.
Makoto Sengoku, market analyst at Tokai Tokyo Research Institute, said: "This mess of bad factors has made it hard for markets to seize a chance to turn up". The average was briefly down 539 points.
The Nasdaq experienced its worst day since August 18, 2011, falling 329 points, or 4.4 percent to 7,108, 10 percent from its August 29 all-time high.
Declining issues outnumbered advancers for a 5.72-to-1 ratio on the NYSE and a 4.29-to-1 ratio on the Nasdaq. It too erased all of its gains for 2018.
Markets have been rattled in recent weeks by increased worries over the impact that rising interest rates, inflation and the escalating trade dispute between the USA and China may have on Corporate America.
"Once the elections and earnings are out of the way, we'll have a calmer market but not necessarily a big move up", Ramos said. The Chinese yuan fell to 6.9641 against the greenback, flirting with its weakest point in almost a decade.
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Following the ugly public spat, the government chose to send both Verma and his deputy Rakesh Asthana on leave. By Friday morning, Asthana also filed a petition against the government order sending him on leave.
Chip companies also sank following a disappointing forecast from Texas Instruments, which dropped 8.2 per cent. That's higher than what many economists had been projecting, but lower than the 4.2 percent rate of growth in the second quarter.
Chipmaker Intel was a bright spot, gaining 2 percent after reporting a strong quarter. That's the Nasdaq's biggest drop since August 2011, but it's still up 3 percent for the year.
The tech-heavy Nasdaq composite dropped 170 points, or 2.3 percent, to 7,151.
In a further sign that economic growth is moderating, USA business spending on equipment appeared to have remained slow in September and the goods trade deficit widened further as rising imports outpaced a rebound in exports.
Wednesday was rough for all the USA major indexes, especially the Nasdaq. The yield on the 10-year Treasury note remained at 3.12 percent.
ENERGY: Benchmark U.S. crude edged up 0.6 percent to settle at $66.82 a barrel in NY.
Wholesale gasoline gained 0.1 percent to $1.82 a gallon.
Toyota Motor Corp. gave up 2.1 percent while Hong Kong-based retail supply chain giant Li & Fung Ltd. lost 2 percent.
The dollar weakened to 112.08 yen from 112.23 yen. The euro rose to $1.1408 from $1.1393. Silver fell 0.3 percent to $14.63 an ounce.
A bear market is one where stock prices decline at least 20 percent from their recent peak. Western Digital dropped 8 percent in extended trade. Britain's FTSE 100 was flat at 6,960, underperforming after poor earnings from ad giant WPP.