Fears that economic growth is slowing have been compounded by a series of disturbing movements in Washington in recent days.
The turmoil in Washington worries traders in other countries about the leadership of the world's largest economy.
"Japanese investors are absolutely shocked at the absence of the leadership team in Washington," Jesper Koll, head of Tokyo's WisdomTree Japan, the mutual fund, said CNN. "The reality is that the president no longer has a team of credible leaders to manage the US and global economies."
These doubts come from concerns about how much the US economy could lose momentum next year.
"Markets are in a panic that has fueled the US economy," said Stephen Innes, head of Asia-Pacific trading at online broker Oanda, in an email. "As the US economy turns south, global capital markets are in a world of pain."
Global investors have already had a laundry list of worries, including China's slowing economy, Trump's trade war with China, and Brexit's unpredictability.
"There's a lot of 'This is one of the biggest things the market does not like,' said Andrew Sullivan, a Hong Kong-based market economist, told CNN.
Some of the world's largest markets are still on sell-off Wall Street on Christmas Eve The stock exchanges in London, Frankfurt, Hong Kong and Australia remain closed and must digest the recent turmoil when they reopen on Thursday.
CNN's Jethro Mullen, Richards Richier, David Goldman and Nathaniel Meyersohn contributed to this report.