US stocks have seen their worst first half of a year since 1970
In the last six months, the benchmark S&P 500 index fell 20.6%
while other major US indexes also dropped sharply.
Stocks in the UK, mainland Europe and Asia have also suffered steep losses.
Some economists expect the US, which is the world's biggest economy, to go into a recession as early as this year as interest rates continue to rise.
"If the US Federal Reserve continues hiking rates the stock market will react quite negatively," Dan Wang, chief economist at Hang Seng Bank China, told the BBC.
Shane Oliver at AMP Capital said: "Shares are likely to see continued short-term volatility as central banks continue to tighten to combat high inflation, the war in Ukraine continues and fears of recession remain high."
Another major US stock index, the Dow Jones Industrial Average, fell by more than 15% in the first half of this year, the biggest drop for the period since 1962.
At the same time the technology-focused Nasdaq Composite lost almost 30%, marking its largest percentage drop for the first half of a year.
The UK's FTSE 250 has dropped by more than 20%, while Europe's Stoxx 600 index has slipped by almost 17% and the MSCI index of Asia-Pacific markets has fallen by more than 18%
It comes as many of the world's biggest central banks take steps to slow the rising cost of living, including raising interest rates.