Donald Trump's use of the word correction to describe the sell-off could be significant.
The president said of the market losses, "Actually, it's a correction that we've been waiting for a long time".
At market close on Wednesday, the Dow (^DJI) lost 3.15%, or 831.83 points, and the S&P 500 (^GSPC) fell 3.29%, or 94.66 points. It has fallen almost 5 percent from its all-time closing high on September 20.
The Nasdaq has fallen 8.5 percent from its record closing high on August 29.
Stocks have sold off in recent days on worries about higher borrowing costs.
A spike in Treasury yields and solid USA economic data have sparked concerns that the Federal Reserve may pick up the pace of its interest rate hikes.
Ahead of a campaign rally for the USA mid-term elections next month, Trump told reporters: "I think the Fed is making a mistake".
USA stocks tumbled Wednesday the most since February as fresh concern about the impact of the trade war with China roiled technology and industrial shares.
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Steve Massocca, senior vice president at Wedbush Securities in San Francisco, said he thought the downturn would be short-lived.
Gina Martin Adams, the chief equity strategist for Bloomberg Intelligence, said investors are concerned about the big increase in yields, which makes it more expensive to borrow money.
"It's probably the beginning of the correction", said Oliver Pursche, vice chairman and chief market strategist at Bruderman Asset Management in NY.
The Fed has been raising interest rates gradually since December 2015, and last month lifted its target for short-term rates to a range of 2 per cent to 2.25 per cent, responding to an economy that has been growing at a pace well above what Fed officials believe is sustainable.
"I don't think it's that at all", he said.
He has frequently criticised the U.S. central bank for gradually raising interest rates, and on Wednesday reiterated his position: "I really disagree with what the Fed is doing". "They're so tight. I think the Fed has gone insane", Trump said.
"It is clearly a necessary development for those economies that are showing much improved growth, inflation that is picking up... unemployment that is extremely low", she told reporters in Bali where the Fund is meeting.
The 10-year yield is now 3.20 percent, the highest in than seven years and up sharply form 2.82 percent in late August.