In Europe the FTSE (-2.7%) and DAX (-2.8%) were hit hard, playing catch up to the huge losses seen on Wall Street the night before.
Stateside, the Dow added 61 points (-0.5%), whilst the S&P 500 shed one point and the Nasdaq lost 0.9%.
The big news, however, came after the bell on Saturday morning Australian time, when ratings agency S&P downgraded the US credit rating from the coveted AAA, to AA+.
The move ignited concerns that it will lead to a further economic slowdown.
As well as downgrading the credit rating, S&P kept their outlook for US debt at ‘negative’ amid decreasing confidence that Congress will end the Bush-era tax cuts or reduce burdensome entitlements.
US stocks have slumped for two consecutive weeks now, amid poor consumer spending and manufacturing data which have showed that the world’s largest economy is struggling.
The losses are set to continue this week, with the Wall Street Futures currently 250 points lower on the back of the S&P downgrade.
Currency markets have also reacted violently this morning, with the US dollar falling to a record low against the Swiss franc and moving sharply lower against the yen.
Elsewhere, the Aussie dollar has fallen against the greenback amid speculation investors will sell higher-yielding assets following the S&P downgrade.
In company news, JBH reported a 7.6% drop in FY net profit to $109.7 million in a challenging period for the retail sector.
Today’s session will bring us data in the form of ANZ job advertisements at 11:30am, AEST.