New York share indicies hit six-week lows and London fell to its lowest level in a month as markets were forced to face the risk that Donald Trump's inability to pass health care laws means he might not get tax cuts for business through the US political system.
The dollar hit the lowest level since the US presidential election in November.
In Dublin, cement maker CRH was in the storm. The Iseq index was almost 1pc weaker. CRH shares fell more than 2.5pc to €31.8850 each by late afternoon - enough to knock more than €600m off the value of the business.
Dublin-based CRH has significant business in the US and was widely seen as a key Irish beneficiary if President Trump followed through on campaign vows to boost spending on roads and bridges.
CRH fell in line with other shares that, since November's US election, had been tipped to gain from Trump policies.
The-so called Trump Trade rally in global equity markets since the US election has been driven by a reflation bet linked to the hope for increased infrastructure spending and tax cuts.
"The agenda is quite badly dented now - (Trump has) got a lot of consensus building to do," Ken Odeluga, a market analyst at City Index, said.
"That's going to delay his ability to be really, really effective in terms of pushing through tax reform and pharmaceuticals reform and certainly will delay coming back for another bite of this healthcare reform," Mr Odeluga added.
Wall Street main indexes hit their lowest levels in six weeks on Monday after Republicans pulled a healthcare bill, raising questions about President Trump's ability to deliver on his ambitious economic agenda.
The health bill - which was set to overhaul the Affordable Care Act, or Obamacare - was Trump's first major legislative move and crashed out last Friday.
Yesterday, the dollar fell to its lowest since November against a basket of currencies. It had found favour on the possibility of tax cuts and higher infrastructure spending. Prices of safe-haven gold shot up to one-month highs.
These are seen as signs that investors have lost confidence in prospects for a US fiscal spending boost under President Trump after his bill failed to pass.
Bank stocks, which had outperformed in the post-election rally on bets of tax cuts and simpler regulations, took a beating on Monday.
Bank of America was down 3.6pc and JPMorgan 2pc, with the two stocks being the biggest drag on the S&P 500.
Goldman Sachs fell 3pc, shaving 45 points off the Dow.
The S&P 500 financial index was off 2.2pc, far under-performing the other eight losers among the major S&P sectors.
"The markets around the globe are falling as a rethinking of the 'Trump trade' begins to focus on reality," Peter Cardillo, chief market economist at First Standard Financial in New York, wrote in a note.
"While we don't expect a full-blown correction to commence at this time, we do see rising negative sentiment replacing the 'Trump trade'."
Utilities and real estate - the defensive plays of the S&P 500 - were the only ones in the black in the US yesterday.
Investors looking for clues on the timing of the next interest rate hike will be listening carefully to comments from Chicago Federal Reserve President Charles Evans and his Dallas counterpart, Robert Kaplan.
Fed Chair Janet Yellen is scheduled to speak at a conference in Washington DC today.
(Additional reporting agencies)