Following a 600 plus point loss for the Dow on Monday and heavy selling in Asia European stock markets are expected to fall heavily Tuesday.
The DAX is expected lower by 258 points, the FTSE100 is called lower by 229 points and the CAC 40 is expected lower by 137 points.
With US futures coming under further pressure in overnight trade and Asian stock exchanges falling between 4 and 9 percent money has also been pouring out of oil and into safe haven assets like the Swiss Franc and gold amid fears over a debt crisis in the US and euro zone.
The huge losses come despite the ECB's attempts to prop up the Spanish and Italian bond markets on Monday and a call from President Obama for Washington to get to grips with America's debt burden.
Jean-Claude Trichet, president of the ECB, used an interview on German TV on Monday to defend the ECB's decision to intervene in the market whilst in the U.S. Republican's immediately rejected a proposal from President Obama to focus on tax hikes as well as spending cuts.
"We observed that our decisions in the euro zone did not have the intended effect," Trichet said, according to a German translation of his comments broadcast on Germany's ZDF network.
"That is why we decided to deviate from our monetary policy rules," Trichet added.
We will also need to focus on China as we await tonight's meeting of the Federal Reserve following news that inflation in July topped 6.5 percent, piling pressure on the People's bank of China to do more to curb soaring prices.
Banks will be very much in focus at the open in Europe following huge losses for U.S banking stocks with Bank of America Merrill Lynch a major loser following news AIG is suing the bank for massive mortgage "fraud".
BofA management rejected what it described as AIG's excesses and ruled out speculation it will need to raise more capital.
Regulators in Athens have banned short-selling for two months effective today.