The Standard & Poor's 500 index dropped 43 points, or 2.1 percent, to close at 2,035. It was the index's biggest percentage decline since February 2014. The Dow Jones industrial average slid 358 points, also 2.1 percent, to 16,990.
The Nasdaq fell 141 points, or 2.8 percent, to 4,877.
Worries over China were again the catalyst for the losses. The Shanghai Composite dropped 3.4 percent Thursday on heavy selling of energy and property companies.