European stocks have plummeted to a 20-month low this morning.
The sharp global selling of stocks was triggered after Wall Street suffered its worst losses in eight months. Shares in Asia followed suit, plunging to a 19-month low.
The US Federal Reserve has been raising interest rates in order to normalise the market, having hiked rates three times this year with another expected before year-end. Investors fled from particularly risky assets which hit technology stocks hard Wednesday.
Euronews' Business Editor Sasha Vakulina called the European market instability a "reaction" to the US share sell-off. Vakulina noted that although the US market action may have sparked the tumble, Brexit, trade war tensions and Italian high yield bonds are among the European-centric factors affecting the European market.
US President Donald Trump commented on the stock market sell-off Wednesday, calling it "a correction that we've been waiting for for a long time" although adding that he thinks "the Fed has gone crazy" and are "making a mistake". Criticism of Federal Reserve monetary policy is rare for a sitting US President due to the body's independence from the government.
International Monetary Fund (IMF) chief Christine Lagarde defended the independence of central bank policy.
"All over the world, it is certainly a good principle to have independence of the central banks and of the central bank governors. Certainly, we have advocated that in all countries, and I think that the Fed is no exception," Lagarde said to CNBC.
The IMF chief also urged countries to "de-escalate" trade frictions Thursday, saying that trade wars could be detrimental to global market stability and would hurt “innocent bystanders”. This comes after Trump accused China of deliberately manipulating its currency, an accusation Beijing denies.