REUTERS/Gary Cameron

The global financial market sell-off is only getting worse.

All of the major U.S. equity indices are crashing through their lows of the day:

  • The Dow is down 335 points or 2.2%
  • The S&P 500 is down 37 points or 2.3%
  • The Nasdaq is down 75 points or 2.1%

This extends yesterday’s sell-off, which appeared to be triggered by Fed Chairman Ben Bernanke’s suggestion that the Federal Reserve could begin to taper, or gradually reduce, its quantitative easing program later this year.

The global sell-off snowballed after China reported that manufacturing activity in June was decelerating at a higher clip than expected.  China is the world’s second largest economy and it is also a key source of global economic growth.

Stock markets across Europe and Asia were devastated.

Commodities are getting demolished:

  • WTI crude oil prices are down 2.9%
  • Natural gas prices are down 2.0%
  • Gold prices are down 6.5%
  • Silver prices are down 8.7%
  • Copper prices are down 3.0%
  • Corn prices are down 1.7%
  • Soybean prices are down 1.9%

And it doesn’t stop there.  The suggestion that the Fed could soon taper its bond purchases has Treasury rates tumbling and interest rates surging.  At one point, the 10-year Treasury yield got as high as 2.47%.

All of this volatility has been particularly ugly for the emerging markets, where investors have yanked their funds, exacerbating fears of a “sudden stop” in those developing economies’ access to the global financial markets.

Brazil and Turkey were among the countries that got punished today. Here’s a round up of some emerging market debt that got smashed:

  • Indonesian 10-year yields are up 56 basis points to 4.76%
  • Russian 10-year yields are up 46 basis points to 4.14%
  • Turkish 10-year yields are up 46 basis points to 4.60%
  • Mexican 10-year yields are up 17 basis points to 3.76%
  • Brazilian 10-year yields are up 14 basis points to 4.11%

The breadth of the sell-off is certainly stunning.

“Rare to see every futures market I follow down,” tweeted bond trader Ed Bradford earlier today.

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