NEW YORK, New York: U.S. stocks dived on Wednesday as investors and traders fretted about the passing of the budget bill by Congress which will bring in widespread tax cuts, which many say the nation cannot afford as it will add to the country's spiralling debt.

"The questions now is, from a fiscal perspective, what will the tax bill look like, and will it undo all of the recent fiscal frugality by simply raising the debt level at a slower rate of pace? So I think that's why the 10-year yield is moving higher, because investors are worried that we're really not doing anything to slow the pace of inflation and to reduce the debt," Sam Stovall, CFRA Research chief investment strategist, told CNBC in an interview.

"Now it seems as if there is a greater chance that the tax bill will pass, and that could end up simply continuing to raise the overall debt level," he continued. 

The U.S. dollar also sold off Wednesday as Treasury yields jumped sharply. The 30-year TRB rose above 5 percent while the 10-year neared 4.60 percent, their highest levels in 18 months.

Wall Street endured a brutal trading session Wednesday, with all three major U.S. benchmarks tumbling more than 1 percent amid growing economic concerns.

• Standard and Poor's 500 (^GSPC): Plunged 95.85 points (1.61 percent) to close at 5,844.61

• Dow Jones Industrial Average (^DJI): Crashed 816.80 points (1.91 percent) to 41,860.44

• NASDAQ Composite (^IXIC): Dropped 270.07 points (1.41 percent) to 18,872.64

The selloff marked the worst single-day decline in months for the blue-chip Dow, with all 30 components finishing in negative territory.

Trading Volume Surges

The selloff occurred on heavy volume:

• NYSE saw 3.09 billion shares trade hands

• NASDAQ volume hit 9.78 billion shares

Looking Ahead

Market participants will closely monitor:

• Thursday's jobless claims data

• Friday's PCE inflation report

• Federal Reserve officials' upcoming speeches

Global Forex Markets Wrap: Euro and Pound Gain as Dollar Slips Against Major Peers

The foreign exchange markets saw mixed movements on Wednesday, with the US dollar weakening against European currencies and the Japanese yen. Here's a breakdown of the latest forex rates and key trends:

Major Currency Pairs

• EUR/USD (Euro/US Dollar): 1.1329, up 0.42 percent – The euro extended gains amid improving Eurozone economic sentiment.

• GBP/USD (British Pound/US Dollar): 1.3426, up 0.26 percent – Sterling climbed as UK inflation concerns lingered.

• USD/JPY (US Dollar/Japanese Yen): 143.63, down 0.60 percent – The yen continued to strgthen despite Japan's ultra-loose monetary policy.

• USD/CHF (US Dollar/Swiss Franc): 0.8253, down 0.34 percent – The Swiss franc firmed as risk appetite waned.

Commodity-Linked Currencies Advance

• AUD/USD (Australian Dollar/US Dollar): 0.6437, up 0.21 percent – The Aussie rose on stronger commodity demand.

• NZD/USD (New Zealand Dollar/US Dollar): 0.5941, up 0.28 percent – The Kiwi dollar followed regional peers higher.

• USD/CAD (US Dollar/Canadian Dollar): 1.3849, down 0.47 percent – The Canadian dollar gained as oil prices rebounded.

Market Drivers

• Dollar Softness: The US dollar index (DXY) dipped as traders assessed Fed rate cut expectations.

• Euro Strength: Hopes of a Eurozone recovery bolstered the euro.

• Yen Volatility: The yen saw choppy trading amid intervention warnings from Japanese officials.

Analysts now await Thursday's US jobless claims and Eurozone PMI data for further direction.

Global Markets Close Mixed on Wednesday; Asia Shines While Europe Lags

Investors navigated a divided global market landscape on Wednesday, with Asian benchmarks broadly advancing while European indices struggled. Here's a comprehensive roundup of the day's closing figures:

Canada

North of the border, Canada's benchmark index joined the downward trend:

• S&P/TSX Composite (^GSPTSE): Fell 216.46 points (0.83 percent) to 25,839.17

UK and Europe

• FTSE 100 (UK): 8,786.46, +5.34 (0.06 percent)

• DAX (Germany): 24,122.40, +86.29 (0.36 percent)

• CAC 40 (France): 7,910.49, -31.93 (0.40 percent)

• Euro Stoxx 50: 5,454.46, -0.19 (flat, 0.00 percent)

• Euronext 100: 1,602.39, -1.13 (0.07 percent)

• BEL 20 (Belgium): 4,523.38, +18.59 (0.41 percent)

Asia-Pacific & Southeast Asia

• Nikkei 225 (Japan): 37,298.98, -230.51 (0.61 percent)

• Hang Seng (Hong Kong): 23,827.78, +146.30 (0.62 percent)

• SSE Composite (China): 3,387.57, +7.10 (0.21 percent)

• TWSE (Taiwan): 21,803.91, +277.88 (1.29 percent)

• KOSPI (South Korea): 2,625.58, +23.78 (0.91 percent)

• SENSEX (India): 81,596.63, +410.20 (0.51 percent)

• IDX Composite (Indonesia): 7,142.46, +47.86 (0.67 percent)

• FTSE Bursa Malaysia KLCI: 1,544.80, -4.07 (0.26 percent)

• S&P/ASX 200 (Australia): 8,386.80, +43.50 (0.52 percent)

• All Ordinaries (Australia): 8,611.70, +38.30 (0.45 percent)

• S&P/NZX 50 (New Zealand): 12,703.10, +58.87 (0.47 percent)

Middle East & Africa

• TA-125 (Israel): 2,661.08, -23.12 (0.86 percent)

• EGX 30 (Egypt): 31,836.60, +207.30 (0.66 percent)

• Top 40 USD (South Africa): 5,161.86, +52.64 (1.03 percent)

Key Market Movers

• Asia's Strength: Taiwan's TWSE led gains (+1.29 percent) on tech optimism, while Malaysia's KLCI (-0.26 percent) bucked the regional trend.

• Europe's Split: Germany's DAX (+0.36 percent) outperformed France's CAC 40 (-0.40 percent) amid mixed economic signals.

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