U.S. stocks Tuesday morning shed gains made in the first trading session of the week amid high volatility as worried sellers outmatched bargain-hunting buyers. Monday’s rally was wiped out as skittish investors saw mining and automotive stocks plunge in Europe days after the U.S. Fed fueled global uncertainties by not raising interest rates.

“As we see it, the disturbing decision by the Fed not to raise rates last week suggests that the Fed has now created a new ‘bubble of uncertainties’ likely to lead to a breakdown of confidence,” Peter Cardillo, chief market economist at Rockwell Global Capital, said in a research note.

The Dow Jones Industrial Average (INDEXDJX:.DJI) lost 171.57 points, or 1.04 percent, to 16,338 in Tuesday morning trading. The Standard & Poor's 500 index (INDEXSP:.INX) fell 21.36 points, or 1.02 percent, to 1,947. The Nasdaq composite (INDEXNASDAQ:.IXIC) declined 60.25 points, or 1.25 percent, to 4,769.  All 10 major U.S. sectors were in the red, led by drops in raw materials and industrials.

European equities were hammered Tuesday by steep losses in mining and automotive stocks. France's CAC 40 led the decline with a 3.49 percent drop, while the German DAX and British FTSE were down 3.33 percent and 2.52 percent, respectively, in afternoon trading.

Glencore PLC (LON:GLEN), the world’s largest listed commodities company, fell nearly 13 percent to 103.65 pence in London, while fellow mining giants Anglo American plc and ArcelorMittal were also pulled down on fears that China’s demand for raw materials will continue to fall.

“Measuring the underlying pace of industrial activity is crucial to understanding the outlook for the world’s second-biggest economy,” Dan Smith, metals analyst for Oxford Economics said in a research note. “Unfortunately hard reliable data is difficult to collect, adding to the challenges of understanding this key country.”

European automakers also helped drag regional markets down over concern that Volkswagen Group’s emissions-cheating controversy could prompt a larger European investigation into diesel cars made by other German automakers. Bayerische Motoren Werke AG (FRA:BMW) shares plunged nearly 5 percent in Tuesday trading, while Mercedes Benz-maker Daimler AG (FRA:DAI) dropped more than 5 percent. More than a third of cars made by both companies use diesel engines.

Meanwhile, Hong Kong’s Hang Seng closed up a slight 0.18 percent, while the Shanghai Composite Index ended Tuesday with a 0.92 percent gain. Japan’s Nikkei 225 dropped 1.96 percent.