The NZX has seen share prices slashed after it opened for trading on Wednesday.
On Tuesday, Wall Street suffered its biggest-ever one-day loss when the Dow Jones fell 5 percent. The New Zealand market was closed on Waitangi Day, leaving it to catch up today.
Prices are down about 2 percent on the NZX 50, with nearly 100 stocks seeing falls. The market sits down 168 points at 8073, after just the first half hour of trading.
Newsroom Pro editor Bernard Hickey says the plunge will affect New Zealanders' KiwiSaver accounts, but this won't matter for most people in the long term.
"Those people who are checking their balances daily will get a bit of a fright, but for most people, they're looking at 10, 20, 30 years down the track, before they actually withdraw their KiwiSaver money," he says.
"Unless you happen to be one of those people taking their money out to put a deposit on a house... you should be relatively relaxed."
US expert John Fenoglio agrees and urges caution before selling off.
"Most financial experts say 'don't panic', they say it's more important to watch and wait, before making any drastic changes to your portfolio," he says.