Stocks fell sharply on Wednesday, adding to Wall Street's poor start to the final quarter of 2019 as investors grapple with fears of an economic recession.

The Dow Jones Industrial Average declined by 494.42 points, or 1.9% to close at 26,078.68. The Dow also broke below its 50-day and 100-day moving averages, two technical levels watched by traders. The S&P 500 lost 1.8% to 2,887.61 to fall below its 100-day moving average as the tech sector dropped 2%. All 11 S&P 500 sectors were down, with 10 of them sliding at least 1.2%.

The Nasdaq Composite slid 1.6% to 7,785.25 as large-cap tech companies followed the broader market lower. Amazon, Apple and Alphabet all dropped at least 1.3%. Microsoft shares also fell 1.8%.

"It now seems the amount of time we've been biding and our inability to actually get a trade deal is now actually affecting growth," said Yousef Abbasi, director of U.S. institutional equities at INTL FCStone. "The mentality is shifting from 'do we get a trade deal and how does that affect growth' to 'how much longer do we have to wait?'"

"People now seem to be gravitating toward the idea that you've essentially paralyzed the corporate community from investing," Abbasi said.

Equities were down on the second day of the fourth quarter after the Institute for Supply Management said U.S. manufacturing activity fell last month to its lowest level in more than 10 years.