The S&P closed off 1.8 per cent in its first four-day losing streak since December 2013 and its biggest drop since 9 October. It fell as much as 1.99 per cent in the session while the Dow Jones Industrial Average tumbled as much as two per cent.
Crude oil futures prices dropped to their lowest since 2009 amid a global supply glut and lacklustre demand. US crude fell five per cent to below $50 a barrel.
The euro fell to a near nine-year low against the dollar of $1.18605 on the EBS platform, tumbling on political uncertainty in Greece and fears of a possible Greek exit from the Eurozone.
There were more than three times as many declining stocks on the New York Stock Exchange as advancing issues and more than twice as many Nasdaq losers than gainers. Strength in the dollar also put more pressure on dollar-denominated commodities. A measure of the greenback against a basket of major currencies hit its highest since December 2005.
The Dow Jones industrial average fell 331.34 points, or 1.86 per cent, to 17,501.65, the S&P 500 lost 37.62 points, or 1.83 per cent, to 2,020.58 and the Nasdaq Composite dropped 74.24 points, or 1.57 per cent, to 4,652.57.
The S&P 500 energy sector closed off four per cent, and the health sector fell 0.6 per cent.