The Dow dropped 1,191 points – 4.4 percent – in its worst-ever points drop in a single day.
The Dow Jones Industrial Average is now on track for its worst day since the 2008 financial crash.
The market index measures the stock performance of 30 large companies listed of the US stock exchange.
The S&P 500 index, which measures the financial performance of 500 large companies on the US stock exchange, recorded its worst day since August 18, 2011.
The market closed down 4.4 percent and below 3,000 points.
The Nasdaq Composite index, which is heavily weighted towards IT companies, also fell by 4.6 percent (414 points).
The market crash, as indicated by the three major stock index’s, has caused widespread panic in the US.
Several analysts have predicted firms will see no growth throughout 2020 with others predicting a recession may be on the way.
Goldman Sachs on Thursday said earnings for companies in the S&P 500 index might not grow at all this year following the outbreak of the coronavirus.
The firm had earlier in the year predicted growth of 5.5 percent.
In a note to clients the firm said: “US companies will generate no earnings growth in 2020.
“We have updated our earnings model to incorporate the likelihood that the virus becomes widespread.”
Former Federal Reserve Chair Janet Yellen warned on Wednesday the US could be plunged into a recession.
Ms Yellen said: “It is just conceivable that it could throw the US into a recession.
“Market participants will look to the Fed to provide some support.
“The Fed does have some scope — but it will provide a little bit of support to consumer spending and to the U.S. economy and for financial markets.”
This is a developing news story, more to follow.
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