The Standard & Poor's 500 index (S&P 500) declined 4.1 percent to 2,648.94 points.
The Dow Jones industrial average fell 438 points, or 1.8 percent, to 23,434. South Korea's Kospi declined 2.9 percent to 2,418.70 and the Shanghai Composite index was off 2.2 percent at 3,412.55. The VIX's bond-market cousin reached its highest since April. Netflix's stock price is up 33 percent while Amazon's is up 19 percent, according to FactSet data.
GETTY CNBCMarkets in Asia led the global selloff today. Figures correct as of 2.30pm GMT
The Dow recovered some of its early plunge and was down 127 points, or 0.4 percent, at 24,255.
US stocks opened down and slid lower in early trading on Thursday, as volatility kept the markets in its grip.
In Europe, Germany's DAX fell 1.2 percent, while France's CAC 40 lost 1.2 percent.
Analysts have also been saying the market has gotten much too expensive after a huge run-up over the past year and has been long overdue for a pullback.
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A storm in February 2015, logging in at 16.2 inches, was the last time Chicago had more than 10 inches of snow in a single storm. The snow that began falling late Thursday afternoon was expected to continue through Friday as the storm moves east.
USA markets began to recover after the sinking.
"I was actually expecting a correction to occur, the fundamentals were getting a little ahead of themselves and I've lived through three major corrections", said Lampe. Bond yields are rising as the Federal Reserve trims its USA bond holdings.
But inevitably investors took advantage of the sharp drop in prices to come back into the market, sending the key indexes higher.
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He said: "The regulators need to address this issue because a drop like this is worse than anything on the street, we are talking about real companies with revenue streams". It's still up 15 percent over the past year.
"The market had gotten way ahead of itself", said Nancy Tengler, chief investment officer of Heartland Financial. The housing industry is solid and manufacturing is rebounding. "I don't see the possibility of a recession any time soon". That combination usually carries stocks higher.
"And this has really triggered a spike in volatility because it's brought into question where higher interest rates are going to curtail the global growth story or erode corporate profitability". And rates have run up fast. The dollar index last rose 0.13%, with the euro up 0.06% to $1.2384.
Some investors, however, fear the market is over-stretched in the context of higher inflation and rising bond yields as central banks withdraw their easy money policies of recent years. Copper lost 1.30% to $7,075.85 a tonne.
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The White House was already under scrutiny over its handling of Porter's departure who announced his resignation on Wednesday. Technically, the two men are in PyeongChang, South Korea, where Pence is leading the US delegation at the Winter Olympics.
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