The MSCI world equity index, which tracks shares in 45 countries, fell 7.82 points or 2.03 percent, to 376.48. The Dow Jones industrial average lost 144 points, or 1.1 percent, to 16,128.

Europe’s main bourses fell, with the pan-European FTSEurofirst 300 index ending down 2.21 percent as a 30 percent slump in miner Glencore and a drop in Volkswagen shares added to a glum mood in markets. Frederick also said the Federal Reserve’s September 17 decision to leave interest rates on hold might have raised doubts about the health of the USA economy.

GLENCORE SLIDES: Glencore plunged after an investment bank warned that the company faced a bleak future if commodity prices don’t recover. “Right now, we need evidence that China is not slowing that much and that profits are still going to be OK”.

Drugmakers continued to fall, extending a sell-off that began last week. His remarks come after comments by other Fed officials including Chairwoman Janet Yellen point to a rate increase sometime this year. The sector – a recent favorite of investors – slumped last week after Democratic presidential candidate Hillary Rodman Clinton announced a plan to tackle rising drug costs.

ALCOA SPLIT: Alcoa bucked the downward trend after announcing that it will split into two independent companies. Its bauxite, aluminum and casting operations will be in one company and its engineering and transportation businesses will be in another.

Earlier on Monday, Fed Gov. Daniel Tarullo gave a speech on capital regulation across financial intermediaries (http://www.marketwatch.com/story/feds-tarullo-signals-change-to-insurer-regulation-2015-09-28) at a Bank of France conference.

U.S. stock futures edged lower on Monday, as Wall Street remained wary of the slowdown in the Chinese economy. The stocks of raw material producers have plunged this year as demand from China and emerging markets has slowed. Williams fell 7.9 percent, while Energy Transfer slumped 9.7 percent. The investigation aims to determine who was responsible for selling vehicles with manipulated emissions data, prosecutors in Germany said in a statement.

Elsewhere, European markets were mostly in the red, while oil prices fell, with West Texas Intermediate losing 1.76% to $44.91 a barrel, while Brent dropped 1.80% to $47.74 a barrel. The FTSE 100 index of leading British shares was 2.5 percent lower.

They were weighed by the U.S.-listed shares of Vodafone Group PLC (VOD.LN), which slid 2.9% premarket after the telecom company ended talks with Liberty Global (http://www.marketwatch.com/story/vodafone-liberty-global-end-asset-swap-talks-2015-09-28) about an asset swap. At the same time, reports on consumer spending and personal income are on tap, expected to show a rise in August of 0.3% and 0.4%, respectively.

Comcast Corp. fell 0.4% after saying it would buy a 51% stake in Universal Studios Japan for $1.5 billion.