Wall Street indices have closed lower after a day of choppy trading as interest rate hike concerns and geopolitical tensions weighed on investors.
In New York, the Dow Jones index lost 0.2 per cent, to 34,297. The benchmark S&P 500 slid 1.2 per cent, to 4,356, and the Nasdaq Composite dropped 2.3 per cent, to 13,539.
In a pattern similar to Monday, US stocks swayed between steep losses and modest gains.
The sell-off comes as members of the US central bank's Federal Open Markets Committee (FOMC) convene this week for their two-day monetary policy meeting.
Investors will be looking for clarity on Fed's timeline for hiking key interest rates to combat inflation.
Edward Moya, senior market analyst at OANDA, said market volatility remained elevated.
American Express was the top stock on the benchmark index and the Dow, gaining 8.9 per cent.
IBM and Johnson & Johnson also did well after reporting quarterly results.
It was a bad day overall for tech stocks. Facebook lost 2.7 per cent, Twitter dropped 2.5 per cent, Amazon fell 3.1 per cent and Microsoft shed 2.6 per cent.
General Electric was among the biggest losers on the S&P 500, with a 6 per cent loss after the company beat quarterly earnings expectations, but did not meet revenue estimates.
The Australian dollar was up 0.1 per cent to 71.56 US cents, shortly after 2:00pm AEDT.
IMF cuts growth forecasts
The International Monetary Fund (IMF) has cut its growth forecasts for 2022 and issued a warning about Omicron and rising inflation.
The IMF now expects global growth of 4.4 per cent this year — down 0.5 percentage points from its last update in October.
The downgrade was mainly due to the economic situation in the United States and China, but IMF chief economist Gita Gopinath said few countries would be spared from a slowdown.
In the case of the US, Dr Gopinath said this reflected "lower prospects of legislating the Build Back Better fiscal package, an earlier withdrawal of extraordinary monetary accommodation, and continued supply disruptions".
"China's downgrade reflects continued retrenchment of the real estate sector and a weaker-than-expected recovery in private consumption," she said.
Dr Gopinath said the rapid spread of the Omicron variant had led to renewed mobility restrictions in many countries and increased labour shortages.
"Supply disruptions still weigh on activity and are contributing to higher inflation, adding to pressures from strong demand and elevated food and energy prices."
She said economies would need to adapt to a global environment of higher interest rates as central banks tighten monetary policy to curb inflation.
Commodities
Spot gold was down 0.2 per cent to $US1,848.24 an ounce by 2:00pm AEDT after gaining overnight.
It was similar story on oil markets, where Brent crude fell 0.1 per cent to $US88.06 per barrel, while West Texas crude dropped 0.3 per cent to $US85.29 per barrel.
In Europe, the pan-European STOXX 600 index climbed 0.7 per cent, Germany’s DAX also rose 0.7 per cent, while Britain's FTSE gained 0.1 per cent .
ASX takes $60 billion hit
The Australian share market is closed for the Australia Day public holiday.
On Tuesday, the ASX plunged to a new, eight-month low after news of inflation jumping more than forecast over the last few months of 2021.
The latest consumer price index figures have raised the prospect of early interest rate rises.
By yesterday's close, the All Ordinaries had ended down 2.6 per cent, to 7,248, wiping about $63 billion off its market value.
So far, the index has lost $176 billion for the month in a rocky start to 2022.
The ASX 200 index lost 2.5 per cent, to 6,962, falling below the key 7,000-point level for the first time since May 2021.
Local trading will resume on Thursday.
