Treasury yields retreated from multi-year highs following the inflation data and as investors flocked to the relative safety of USA government bonds.
The roller coaster morning follows Wednesday's 832-point loss, the biggest drop in seven years. "I don't think so", he said.
Bond prices rose as the recent surge in yields attracted the attention of some investors.
"The direct concern is higher interest rates", said Rick Meckler, partner, Cherry Lane Investments, a family investment office in New Vernon, New Jersey.
The S&P 500 also fell 3.3 percent, marking its fifth straight decline, and the Nasdaq declined more than 4 percent, its worst percentage decline since June 2016. (NYSE: NKE) and Boeing Co (NYSE: BA), which declined 7 percent and 6.9 percent, respectively. The pan-European FTSEurofirst 300 index of leading regional shares closed down 1.57 percent. It was at just 3.05 percent early last week and 2.82 percent in late August.
Fears over the global trade war, rising rate hikes, the impact of Hurricane Michael, the upcoming US midterm elections and a potentially disappointing Q3 earnings season likely all played a role in the weak market. Chip gear producers Applied Materials, Teradyne and ASML Holdings fell between 3.5 percent and 4.6 percent.
The Nasdaq composite, which has a high concentration of technology companies, had its biggest loss in more than two years.
"The S&P 500 is looking very weak and negative and that is putting fear into investors", said Michael Matousek, head trader at U.S. Global Investors.
And Geoff Alexander, the president of R. M. Davis, a wealth management firm, said he wasn't getting too nervous about Wednesday's market madness either.
"The Fed is making a mistake". On Wednesday he said he thought policy makers were "making a mistake" and said the Fed had "gone crazy". "It's a correction that we've been waiting for, for a long time".
There are ongoing concerns about the unresolved trade dispute between the US and China.
The International Monetary Fund and the World Bank hold an annual gathering in Indonesia.
The meeting came as Beijing - and investors worldwide - are waiting to see whether the Treasury Department labels China a currency manipulator next week in a report that could potentially set off a new round of recriminations between the two economic giants.
Yi did not tell reporters how the meeting with Mnuchin went on Thursday, but told the Chinese financial magazine Caixin that China was on course to hit its GDP growth targets despite concerns about the trade war and debt levels. Those stocks have made huge gains for years, but they're now out of favor.
Oil prices slumped to two-week lows as global stock markets fell, with investor sentiment made more bearish by an industry report showing US crude inventories rising more than expected.
Shih reported from Hong Kong.