The Dow Jones industrial average fell dropped as many as 536.94 points at session lows, while the S&P 500 broke below its August lows. The Nasdaq composite fell about 3 percent.
While stocks are still sharply lower, they have pared some losses.
"I think you can boil down everything going on in the market to three things. One is we are shifting volatility regimes," El-Erian said. "We've come from a period where central banks had been very successful in repressing volatility and now, either they can't or they're not willing to."
The CBOE Volatility index, considered the best gauge of fear in the market, traded at about 28 Friday, up 17 percent.
VIX in 2016Source: FactSet
The turmoil led investors to buy into safer asset classes, including U.S. Treasurys and safe-haven currencies. The benchmark U.S. 10-year note rose sharply Friday, and briefly yielded less than 2 percent. The Japanese yen gained about 1 percent against the dollar.
Stocks were also under pressure from the oil market, which saw U.S. crude futures settle at $29.42 a barrel Friday, down 5.71 percent.