Major indexes had their biggest drop on Wednesday since June 1.
A report on manufacturing in the New York area also came in far below forecasts.
The Dow Jones industrial average fell 179 points, or 1.5 percent, to close at 11,897. The S&P 500 index fell 22, or 1.7 percent, to 1,265. The Nasdaq fell 47, or 1.8 percent, to 2,631.
Five shares fell for every one that rose on the New York Stock Exchange. Trading volume was 4.2 billion shares.