Wall Street records biggest daily fall in 8-months as all major sectors close in red

• Flight-to-safety weighs on stocks.
• CBOE Volatility Index rises more than 40% on Wednesday.
• Technology sector erases nearly 5%.

After starting the day lower, major equity indexes in the U.S. recorded their largest daily losses since the crash witnessed back in February. The CBOE Volatility Index, Wall Street's fear gauge, rose 42% on the day to reveal that investors ran away from risky assets.

The risk-sensitive S&P 500 Technology and Communication Services indexes fell 4.77% and 3.94%, respectively. Furthermore, concerns over the negative impact of rising Treasury Bond yields and the U.S. - China trade conflict on the economy pulled stocks even lower. "The market is digesting the potential that rates moving upwards eventually seep into the real economy in the form of mortgage rates, auto rates, student lending rates. What we're seeing here is the market positioning for potential lower growth," Mona Mahajan, U.S. Investment Strategist, Allianz Global Investors, New York, told Reuters and argued that we could see a 10% correction before witnessing a recovery.

Meanwhile, the S&P 500 Industrials index closed 3.47% lower and dragged by slumping commodity prices, the S&P 500 Energy index collapsed 3.6%.

Within the Dow Jones Industrial Average, McDonald's became the best performer with a 0.41% drop while Nike led decliners by erasing 6.60% ahead of Microsoft, which dropped 4.96%. The collapse continued even after the closing bell and the DJIA wiped out an additional 100 points, heading into the Asian opening at around 25,495.

The Dow Jones Industrial Average lost 808.68 points, or 3.06%, to 25,621.89, the S&P 500 shed 93.77 points, or 3.26%, to 2,786.57 and the Nasdaq Composite erased 311.36 points, or 4.02%, to 7,426.65.

DJIA technical outlook via FXStreet Chief Analyst Valeria Bednarik

The daily chart shows that the index is currently piercing the 100 DMA, first time around the indicator since last July. The Momentum and the RSI in the mentioned chart reached oversold readings, maintaining their vertical slopes, which means that the current decline could continue before the market tries to stabilize.

In the shorter term, and according to the 4 hours chart, technical indicators also head south almost vertically and currently stand in extremely oversold levels, while the index plunged after failing to surpass a bearish 20 SMA, now over 800 points above the current level.

Support levels: 25,437 - 25,381 - 25,324.

Resistance levels: 25,525 - 25,578 - 25,630.