The Dow Jones industrial average lost 170 points, or 1.1 per cent, to 14,776 Tuesday, the lowest close in two months.
The Standard & Poor's 500 index fell 26 points, or 1.6 per cent, to 1,630. The Nasdaq composite fell 79 points, or 2.2 per cent, to 3,578.
Airline stocks fell sharply as the spike in crude oil brought the threat of higher fuel costs.
Crude oil jumped $3.09, or 2.9 per cent, to $109.01 a barrel, the highest since February 2012.
Gold and bond prices rose.
Six stocks fell for every one that rose on the New York Stock Exchange. Volume was about average, 3.2 billion shares.