US markets reversed earlier gains to end the overnight session deep in negative territory.
It appeared markets were on track for another positive session after the ECB surprised everyone by cutting eurozone interest rates to a new record low.
The ECB decision was followed by the latest US GDP data, which revealed the economy grew at a much faster than expected pace in the third quarter.
Notably, the GDP result was driven largely by inventory restocking, which masked underlying weakness in consumer and business spending.
Investor disappointment with the GDP numbers was compounded by fears the result could yet bring forward the start date for Fed stimulus tapering.
The Dow slumped 153 points (-1%) to 15594, the S&P500 shed 23 points (-1.3%) to 1747 and the Nasdaq tumbled 75 points (-1.9%) to 3857.
Commodities gave back some of their previous gains, with gold and oil weighed down by a resurgence in the US dollar. Gold slipped 0.7% to US$1309 an ounce and oil fell 0.6% to US$94.23 a barrel.
The ECB’s rate cut saw traders pile money into the greenback, which diminished bullion’s safe haven appeal. Oil faced added pressure from signs world leaders were making progress in easing sanctions against Iran.
The euro was another casualty of the ECB’s move to lower interest rates, whilst the Aussie dollar fell below 95 US cents as yesterday’s poor domestic jobs data increased the odds of another RBA rate cut.
In economic news, the third quarter RBA Monetary Policy Statement is due for release at 11:30am, AEDT, whilst Chinese trade data is also due out at some stage today.