The Standard & Poor’s 500 index lost 13 points, or 0.6 percent, to 2,083 and the Nasdaq composite fell 29 points, or 0.6 percent, to 5,030.
But stocks went on a wild ride in the course of the trading session, and at one point of time they were down as much as 5.06 percent.
West Texas crude saw a very small recovery overnight, to $US42.53 a barrel, remaining at six-year lows.
According to Gerry Alfonso sales trader at Shenwan Hongyuan in Shanghai, Chinese stocks would prove to be fruitful in long-term investment, as the economy of China is still going stronger than most of its competitors.
Thai shares, meanwhile, notched their steepest decline this year of 2.56 percent and the baht slid to its lowest level since 2009 after a bomb attack killed at least 20 people and injured scores.
Tokyo closed down 0.32 percent, or 65.79 points, at 20,554.47.
The European markets also ended firmly in negative territory, with concerns over the health of China’s economy, sliding oil prices and the muddled outlook for U.S. interest rates weighing on markets.
Hong Kong stocks entered a bear market as a rout in global equities deepened and the weakest Chinese manufacturing data since the financial crisis added to concerns about the world economy.
The China Securities Regulatory Commission announced on Friday that the state-backed China Securities Finance Corp, which is tasked with buying shares on behalf of the government, will have a long-term role. Hong Kong’s Hang Seng index was down 1.3 percent at 23,167.85. “But that trickle-down effect is heading our way, no doubt about it. U.S. markets have been very robust in the face of this, but it’s really going to be a problem down the road”. Shares of importers and firms with high US dollar-denominated debt have been under pressure along with Chinese airlines who face higher fuel bills following the devaluation.
Gold is set for its biggest weekly advance since January as the sell-off in emerging markets spreads.
Exchange filings also revealed that Huijin is now the biggest institutional investor in Shanghai Taisheng Wind Power Equipment Co and Wuhu Token Sciences Co Ltd, a maker of vacuum thin film materials for panel displays, boosting shares in the companies.
“In the short term, the market will fluctuate on the weak side”, he said.
FED WATCH: The minutes from the Federal Reserve’s July meeting gave no specific clues on whether the central bank’s officials were poised to raise interest rates in September. The contract declined 63 cents to close at $41.87 on Monday after data showed growth contracted in Japan, the world’s third-largest oil consumer.