President Donald Trump again criticised the Federal Reserve for raising interest rates, calling it a "mistake" hours after the worst U.S. stock market sell-off since February. "They're so tight. I think Fed has gone insane", president Trump replied.
"I think the Fed has gone insane", Trump said.
Trump has repeatedly touted Wall Street records as proof of the success of his economic program, including his confrontational trade strategy.
"Clearly stocks are spooked by higher rates and maybe some inflation that seems to be creeping in", said Michael Farr, CEO of Farr, Miller & Washington.
The U.S. Federal Reserve last raised interest rates in September and left intact its plans to steadily tighten monetary policy, as it forecast that the U.S. economy would enjoy at least three more years of economic growth.
"I like low interest rates", Trump said.
Jasper Lawler, head of research at London Capital Group, offered this explanation: "The bloodbath for global equities comes as investors adjust to a world of higher USA interest rates and U.S. treasury yields".
"It's a correction we have been waiting for a long time", Trump said. As stocks go down, tech goes down more than the stock market, ' she said.
The markets have been on a historic climb - with the Dow and S&P each notching dozens of new highs since 2016 - buoyed by a strong USA economy and solid corporate earnings.
Ivan Feinseth, Chief Investment Officer at Tigress Financial Partners, said that although the sell-off caught him off-guard, he thought many investors were unduly frightened by the prospect of rising rates.
The Dow Jones stock market average dropped by 831 points, which is 3.15 percent of its opening value on Wednesday.
And while stocks could get a boost from strong corporate earnings, there are concerns the U.S. trade conflicts will start to undermine profits.
Just two hours before, CNBC reported that an unnamed senior White House official told its correspondent that, "This is a bull market correction". Netflix was down more than 8 percent, Amazon was off 6 percent and Apple and Google were both down more than 4.5 percent.
"To say risk appetite has taken a hit would be an understatement!"
Markets have been shaken by a row between Brussels and Rome, which are at loggerheads after Italy's populist government passed a purse-busting budget last week to the annoyance of the EU. In Paris, shares in Kering fell almost 10 percent, LVMH over seven percent and Hermes around five percent.
In other markets, oil prices fell sharply on worries that Hurricane Michael, which is battering the U.S. state of Florida, will dent demand for gasoline and other petroleum products.