NEW YORK, New York - Wall Street shuddered again on Tuesday as fears of a new virus outbreak attributed to the Covid-19 variant Omicron swept the world. In addition comments by U.S. Federal Reserve Chair Jerome Powell that he no longer considered inflation in the U.S. as transitory, and that the timeline for tapering will be renewed at the Reserve's next meeting, undermined financial markets.

"Powell's comments threw a monkey in the wrench in market thinking in terms of potential taper timing. You're seeing as a result of that, risk-off across the board," Michael James, managing director of equity trading at Wedbush Securities in Los Angeles told Reuters Tuesday.

"You also have to factor in the Omicron variant concerns. You can argue whether they're more headline risk or reality risk but regardless, it's having a significant impact on oil, and everything that's tied to economic growth."

Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia to,d the news agency: "The principal contributor to the decline in stock prices today is the Powell commentary, regarding the upcoming Fed meeting, about accelerating the tapering of their bond-buying program, which obviously leads to the prospect that rate hikes come sooner next year."

The Dow Jones industrials shed 652.22 points or 1.86 percent to 34,483.92.

The Nasdaq Composite sank 245.14 points or 1.55 percent to 15,537.69.

The Standard and Poor's 500 declined 88.27 points or 1.90 percent to 4,569.00.

The U.S. dollar was mixed after losing ground earlier in Asia. At the New York close, the euro was trading stronger at 1.1334. The British pound slumped to 1.3301. The Japanese yen inched lower to 113.08. The Swiss franc was strong at 0.9192.

The Canadian dollar was soft at 1.2779. The Australian dollar dived to a multi-month low of 0.7060, before settling down at 0.,7120. The New Zealand dollar was unwanted at 0.6819.

Overseas, the FTSE 100 in London closed down 0.71 percent. The German Dax lost 1.13 percent. In Paris, France, the CAC 40 was off 0.81 percent.

On Asian markets, the Nikkei 225 in Japan, dived 462.16 points, or 1.63 percent to close at 27,821.76.

In Hong Kong, the Hang Seng sank 376.98 points or 1.58 percent to 23,475.26.

China's Shanghai Composite ignored the gyrations and finished flat, ahead just 1.19 points or 0.03 percent at 3,563.89.

The Australian All Ordinaries advanced 24.90 points or 0.33 p[recent to 7,587.40.