U.S. stock index futures pointed to a sharply lower open, with Dow futures tumbling triple digits as European and Asian shares tumbled in the wake of renewed oil price weakness.
European stocks fell sharply shortly after market open, with the pan-European STOXX 600 down about 3 percent after a weak session in Asia and fresh lows in oil.
Futures trimmed losses after U.S. economic data, with Dow futures off session lows of more than 300 points lower to trade about 240 points lower as of 8:47 a.m. ET.
In economic news, the December U.S. CPI showed a 0.1 percent decline. Ex-food and energy, the index rose 0.1 percent after rising 0.2 percent for three straight months, according to Reuters. In the 12 months through December, this so-called core CPI rose 2.1 percent, the largest gain since July 2012, after climbing 2.0 percent in November.
Building Permits fell 3.9 percent in December. Housing Starts fell 2.5 percent but the seasonally adjusted annual pace remained above a 1 million.
Treasury yields edged off lows, with the near 0.83 percent and the 10-year yield hovering below 2 percent.
The U.S. dollar held a touch higher against major world currencies, with the euro near $1.09 and the yen near 116.72 yen against the greenback.
Once again, miners bore the brunt of the selling, with the likes of Glencore, Anglo American and BHP Billiton all sliding more than 6 percent in London trade. This follows gains as much as 11 percent in the previous session.
Asian stocks slid Wednesday, with major indexes declining by more than 1 percent each, as global sentiment remained low on concerns over economic growth, China and low oil prices.
Japanese stocks took the brunt of the selling, with the Nikkei falling close to 4 percent, entering bear market territory as it has fallen more than 20 percent from its peak in June last year.
Crude futures slumped again in early Asian trade on Wednesday. The U.S. crude oil contract for February delivery, which expires after the close Wednesday, fell below $28 a barrel to its lowest since September 2003 on worries over a global supply glut.
The March contract was trading near $28.90 a barrel, down more than 2 percent.
"Rising risk aversion and the declining oil price has had a marked impact on credit markets, where spreads in high yield issuers remain under pressure, led by energy related issuers, and has undermined mining and resources related shares," said head of multi-asset investment at BMO Global Asset Management, Paul Niven.
"Here, concerns over dividend sustainability are rising despite the recent upturn in non-oil commodity prices (which remain well below year-ago levels). We have seen a number of energy and mining related companies suspend dividend payments and serious questions are being asked on whether some of the highest yielders in the market will succumb to cuts in dividends," he added.
The fall in oil prices followed warnings from the International Energy Agency on Tuesday that oil markets could "drown in oversupply".
The WTI February contract settled down 96 cents, or 3.26 percent, on Tuesday.
Brent futures more than 70 cents to near $28 a barrel, not far from the 12-year low hit on Monday.
Major earnings out Wednesday included results from Goldman Sachs, which beat expectations on both lines. However, profit fell for a third-straight quarter, hit by a $5 billion settlement of crisis-era legal claims.
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F5 Networks and SLM are both set to report after the bell.