The Nasdaq plunged 410 points on Friday, after investors dumped technology stocks.
Web companies and Internet infrastructure providers were among the worst hit, but the old economy stocks were routed too.
Both the Dow Jones industrials and the Nasdaq composite index took a nosedive as inflation fears triggered off a huge selling spree.
The Dow Jones industrial average tumbled at one point by 703 points before closing down 620.18 at 10,303.29. The technology-laden Nasdaq index dove 410 points, but recovered a bit, to close down 357.23 at 3319.55.
The numbers are a far cry from Dow's January high of 11,722.98, and Nasdaq's March high of 5,048.
Analysts' consensus was the sell-off was triggered by the US Labor Department's Consumer Price Index report, which showed a greater-than-expected increase in March consumer prices.
"Inflation came in much worse than expected", causing already skittish investors to dump their stocks, said Ashok Kumar, an analyst with US Bancorp Piper Jaffray, California.
"People were not willing to step in and buy irrespective of the price," Kumar said. "There is more downside to come - typically such a dramatic correction takes time to heal," he added.
Apple closed at $111.875, but lost four more points on the European Tech Stock market, the Easdaq. Taking the full brunt of investor anxiety were several popular Internet stocks that as recently as this January seemed unstoppable.
Among them were Yahoo, which dropped nearly 15 per cent to $116, and CMGI International, which sunk 22 per cent to $51. Even Amazon.com lost over 4.5 per cent of its value, ending at just over $45 compared to the 12-month high of $113 last December.
Also bloodied badly were Internet infrastructure technology vendors such as Akamai Technologies and Inktomi. Akamai closed at $65, down 26 per cent - a huge difference from the $345 it traded at as recently as January. Inktomi lost nearly ten per cent of its value to $51.
But Web companies were hardly the only technology stocks to be hit. Blue chips’ such as IBM, Cisco Systems, Microsoft and Hewlett-Packard, all saw significant market erosion today. IBM stock dropped over six per cent to $103, Cisco by nearly seven per cent to $57, Microsoft by nearly seven per cent to $74, and HP by over eight per cent to $121.
Sun Microsystems, which reported better-than-expected earnings yesterday, managed to remain comparatively untouched, despite being one of the most heavily traded stocks of the day. It closed down 1.6 per cent to just over $76.
Tokyo's Nikkei lost five per cent on the day, and News Corporation shares tumbled a massive 15 per cent, partly on the news of Rupert Murdoch's prostrate cancer, Reuters reports.