The Dow dropped 149.76 points, or 0.94 percent, to close at 15,698.85.
The Nasdaq closed at 4,103.88 points, off 19.25 or 0.47 percent.
The Standard & Poors 500 lost 11.60 points, or 0.65 percent, to 1,782.59.
"It certainly seems from the flow we're seeing now that it's that same risk that's being unwound, driven by the negative headlines we've seen out of -- predominantly -- the emerging markets," Joe Spinelli, head of North American cash equity trading at Deutsche Bank, told the Wall Street Journal.
MarketWatch.com said the S&P 500 and the Dow posting their largest monthly percentage decline since May 2012.
On the New York Stock Exchange, decliners were ahead of advancers, 2.85 billion to 1.16 billion on a share volume 4.1 billion shares.
In Japan, the Nikkei 225 index dropped 92.53 points, 0.43 percent, to 14,914.53.
London's FTSE 100 dipped 28.01 points, 0.62 percent, to 6,510.44.
The 10-year U.S. treasury was yielding 2.65 percent.
The euro traded at $1.3488 against the dollar. Against the yen, the dollar was trading at 102.04 yen.
Gold dropped $2.70 to close at $1,239.80 an ounce on the Comex division of the New York Mercantile Exchange. Silver lost a penny to settle at $19.12 an ounce.
Crude oil lost 74 to settle at $97.45 per barrel on the NYMEX.