European markets were also trading significantly lower, continuing a global market sell-off.
What is a stock market correction? Then, however, these papers joined the mass waves and lost more than 2% of their value. In this case, that was less than two weeks ago, when the Dow closed at a record high of 26,616.
Keep the sell-off in perspective, warned Kristina Hooper, chief global market strategist at Invesco.
A key jobs report on Friday - showing strong growth in the United States labour market - appears to have been the catalyst for the rally to come to a halt, at a time when some observers have suggested a so-called correction might be due.
How are global markets reacting?
Markets across the world followed the U.S. decline.
In commodities, US crude fell 2.38 percent to $63.89 per barrel and Brent was last at $67.49, down 1.59 percent on the day.
Shares in other regional markets also were lower.
The Dow was up 141 points, or 0.6 percent, at 24,483. Some are saying the President Trump's new tax cuts may be a factor here.
Bond prices tumbled after moving sharply higher on Friday.
On the Toronto Stock Exchange, the S&P/TSX composite index was down 271.22 points to 15,334.81 in a broad-based decline that saw all sectors finish in the red.
Is this the worst decline ever?
The Dow finished down 1,175.21 points, or 4.6 percent, at 24,345.75.
Wall Street continued its wild ride Tuesday morning as the Dow Jones opened down 522.94 points, or 2.15 percent.
The fall surpasses a previous record 777.68 points drop on the Dow Jones during the financial crisis in 2008.
The Standard & Poor's 500 index fell 14 points, or 0.5 percent, to 2,748. "But in terms of fear I don't think that's appropriate, I don't think panic is appropriate".
Australia's central bank today made a decision to leave its key interest rate unchanged at a record low, as widely expected, saying the low level of interest rates is continuing to support the Australian economy. Energy companies, banks, and industrial firms are taking some of the worst losses.
In fact, since 1990, there have been just four of these instances, and only 13 in the Dow's history. Shares slumped by more than 3% in after-hours trading Monday.
By 1 p.m., the Dow was down 354 points - a 1.4 percent drop.
Does all of this mean we're entering a recession?
Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Technology and industrial companies and retailers moved higher, a possible sign of confidence the US economy will keep growing.
Unemployment is at a 17-year low.