In Europe, the fading momentum was compounded by fresh political uncertainty in Italy where Prime Minister Enrico Letta defied pressure to make way for the centre-left leader Matteo Renzi.
Italian stocks led the losses among the region's bourses with a fall of 1.1 per cent, while the country's government bonds were the worst performers on the debt market. Some people are booking profits and Italy also has bond auctions today."
A batch of disappointing updates from blue-chip companies in Europe also weighed on the region's stock markets.
In Asian trading, Wall Street's stumble overnight and ongoing nervousness about the global recovery had taken their toll.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.7 per cent after jumping 4.5 per cent in the previous five sessions. Japan's Nikkei fell 1.8 per cent but that too was after a 4.6 per cent surge in the past three days.
Markets are still sitting on solid gains that stem from relief over the continuity in Federal Reserve policy, hints that the European Central Bank could provide more support in the euro zone and an easing of pressure on emerging markets.
Janet Yellen's appearance in front of a Senate banking panel scheduled for later has been postponed due to bad weather. But she made it clear on Tuesday, in her first public remarks since becoming Fed chair, that she would not make any abrupt changes to monetary policy.
Adding to the positive mood, Congress approved legislation on Wednesday to increase the US government's debt limit for a year.
In the currency market, the British pound stood out after a surprisingly upbeat economic outlook from the Bank of England prompted markets to price in an interest rate hike in early 2015.
The sterling edged up to $1.6633 in early trading, getting near its 2 1/2-year high of $1.6667 hit late last month.
The euro also saw a bit of a recovery to $1.3626, having tumbled on Tuesday after ECB Executive Board member Benoit Coeure mentioned that cutting rates and charging banks to park spare cash at the ECB was "a very possible option" and one it was looking at seriously.
The biggest mover among the majors was the Australian dollar. It tumbled around one percent to $0.8934 after Australian unemployment hit its highest in a decade, reviving rate cut speculation.
As risk assets took a back seat, oil prices fell with US crude futures back under $100 a barrel after dropping 1 per cent from Wednesday's four-month high. Gold prices also eased to $1,288, after racing to a three-month high of $1,295.91 the previous day.
Recent US data, including two straight months of weak jobs growth, have raised questions over whether the world's biggest economy can sustain the strength it showed in the second half of last year.
While it shows the global recovery may not be as strong as many economists had hoped, investors have the comfort that it could prolong the lifespan of ultra-easy central bank support that has seen a surge in markets in the last couple of years.