The Dow Jones Industrial Average slid 1.66 percent to 12,958.44, dropping below the psychological barrier of 13,000.
The Nasdaq composite shed 1.66 percent to 2,593.38 and the broad market Standard & Poor's 500 index retreated 1.75 percent to 1,433.27.
In London the FTSE 100 index lost 2.71 percent to close at 6,120.80 while in Paris the CAC 40 shed 1.65 percent to end the day at 5,432.57. The Frankfurt Dax fell 1.32 percent to 7,511.97.
The Euro Stoxx 50 index of leading eurozone issues gave back 1.30 percent to close at 4,226.70.
Some investors worried that US consumers might retrench during the upcoming holiday season, putting more pressure on a fragile economy.
"All eyes are on the US consumer. A significant consumer retrenchment could spell doom for the current economic expansion," said economist Scott Anderson at Wells Fargo.
"The list of obstacles for the consumer is long and daunting: falling national home prices, a struggling stock market, a softening labor ma