China has vowed to fight to the end after Trump threatened to impose an additional 50% tariff on Chinese goods unless the country withdraws its new 34% tariff on U.S. goods. A White House official told CNBC the effective tariff rate on China will spike to 104% at midnight, when Trump's other reciprocal tariffs are also set to take effect.

Oil service stocks came under considerable selling pressure, dragging the Philadelphia Oil Service Index down by 5%. The sell-off by oil service stocks came as the price of crude oil pulled back sharply. Airline stocks were substantially weak, with the NYSE Arca Airline Index plummeting by 4%. Biotechnology stocks significantly moved downwards, as reflected by the 3.9% slump by the NYSE Arca Biotechnology Index. Computer hardware, semiconductor, oil producer and housing stocks also moved notably lower amid another day of broad based weakness on Wall Street.

Asia-Pacific stocks moved sharply higher. Japan's Nikkei 225 Index spiked by 6.0%, while China's Shanghai Composite Index jumped by 1.6%. The major European markets also showed strong moves back to the upside. While the U.K.'s FTSE 100 Index shot up by 2.7%, the German DAX Index and the French CAC 40 Index both surged by 2.5%.

In the bond market, treasuries extended the sharp pullback seen over the course of the previous session. Subsequently, the yield on the benchmark ten-year note which moves opposite of its price, jumped 10.7 bps to 4.26%.

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