Global stocks have been sold off, and safe haven asset prices pushed up, as fears of conflict between Ukraine and Russia grow.
The Dow Jones has finished down 0.9 per cent at 16,168.
The broader S&P 500 was down 0.7 per cent to 1,846.
Limiting falls on Wall Street were stronger than expected US manufacturing and consumer spending reports.
The Institute for Supply Management’s manufacturing index was better than expected, despite the poor February weather, rising from 51.3 to 53.2 as new orders improved.
Figures from the Commerce Department shows consumer spending rose 0.4 per cent in January, driven by the purchase of services.
Across the Atlantic, falls were much sharper than in the US as markets worry about Europe’s energy supplies.
Europe relies on Russia for around a quarter of its gas supplies, which is mostly transported through Ukraine.
London’s FTSE 100 fell 1.5 per cent to a two-week low of 6,708.
France’s CAC dropped 2.7 per cent to 4,291, while Germany’s DAX index suffered the biggest fall – down 3.4 per cent to 9,359.
Australian stocks were set for a poor start to trade – at 7:52am (AEDT) the ASX SPI 200 was 0.4 per cent lower at 5,369.
The US dollar and yen gained overnight as investors sought shelter in these currencies, and the Australian dollar was pushed down as a result to 89.22 US cents.
On commodity markets, spot gold, the traditional safe haven, jumped to $US1,351.43 an ounce.
Grain prices jumped sharply overnight because Ukraine is a major producer and exporter.
The US spot price for wheat rose 5 per cent overnight and corn hit a five-month high.
Crude oil prices were also on the rise – West Texas crude rose almost $US3 to $US105.29 a barrel, while Singapore’s Tapis crude price rose to $US117.55.