World shares took their biggest tumble in five weeks on Thursday (June 11).
A sobering outlook from the U.S. Federal Reserve the day before challenged investor optimism.
In a reality check to the stock market's recent euphoria, the Fed predicted the U.S. economy would shrink 6.5% this year.
Bonds rallied on bets yet more stimulus would be needed to ensure recovery.
Asia saw a 10-day winning streak come to an abrupt finish and Europe's main bourses all opened with a heavy thud.
Indexes in London, Frankfurt and Paris were all down more than 2.5% in morning deals.
Sensitive sectors such as carmakers, travel and tourism saw a fourth straight day of drops.
The pan-European STOXX 600 fell 2.5%.
Lufthansa slumped as much as 8.8% after it admitted that positions of up to 26,000 employees are surplus to requirements.
TUI and British Airways-owner IAG were also among the top decliners.
Fiat Chrysler fell over 5% and Peugeot-maker PSA over 7%.
That after a report that the carmakers will face a lengthy EU antitrust probe over their planned merger.
Market sentiment also took a hit as new infections in the U.S. showed a slight increase after five weeks of declines
Oil prices also fell nearly four percent amid renewed concerns about demand.
U.S. data showed crude inventories had risen to record highs.