Stocks pared losses by late morning Thursday, though pressure following a rout on Chinese markets continued.
The S&P 500 fell 0.74%, the Dow Jones Industrial Average was down 0.73%, and the Nasdaq slipped 1.1%.
China's Shanghai Composite plunged more than 7% before triggering a circuit breaker that halted trading. The China Securities Regulatory Commission decided to suspend the circuit-breaker system that went into effect on January 1. Chinese markets have triggered the mechanism twice in just four days.
The yuan continued to plummet, suggesting that the government's attempts to prevent a market meltdown weren't working. The People's Bank of China set the yuan midpoint rate 0.5% weaker than the previous day's fix, the biggest daily drop in guidance since its devaluation last August.
The selloff in China hit the commodities market as investors feared a slowdown in the world's second-largest economy would hit oil demand. West Texas Intermediate crude oil fell to lows not seen since the early 2000s on Thursday after plummeting more than 5% a day earlier. Oil was trading 1.9% lower at $33.32 a barrel on Thursday morning.
The World Bank expects to see slower global growth this year as China's economy continues to slow, commodities fall even further, and Brazilian and Russian economies contract. The organization cuts its 2016 growth forecast to 2.9% from 3.3%.
Expectations for the timing of the next rate hike have been pushed back to June after the Federal Reserve's minutes from its December meeting conveyed a more hesitant central bank. Members appeared more cautious over December's rate hike, the first in nearly a decade, with fears over low inflation still present.