U.S. stocks cratered to session lows by the final hour of trading Wednesday as worries over crude oil triggered broader fears over the global economy. 

The S&P 500 was down 2.5%, the Dow Jones Industrial Average slid 2.3%, and the Nasdaq fell 3.4%.

"The market is extremely bearish right now," Craig Erlam, senior market analyst at Oanda, told TheStreet. "U.S. stocks are going to have a rough ride in the first quarter and oil is, of course, in for more shocks ... Risk appetite is going to be fairly low for the first few months of the year."

An unexpected build in crude inventories ruined a rebound on commodity markets. West Texas Intermediate crude oil closed just 0.1% to $30.47 a barrel after rallying more than 3% Wednesday morning. Crude oil stocks increased by 200,000 barrels in the week ended Jan. 8, according to the Energy Information Administration.

Crude prices fell briefly below $30 on Tuesday for the first time since December 2003. Commodities have been testing new 12-year lows in the past week as oversupply concerns persisted.

"The fundamentals are strongly against oil at this stage and we're still seeing this oversupply story," added Erlam. "Even if we see production in the U.S. drop off further, it's only slightly below the highest level we had in the middle of last year."

Energy stocks were among the worst performers on markets as investors prepared for further downside to commodity prices. Williams Cos.  (WMB) , Energy Transfer Equity (ETE) , Tesoro (TSO)  and NGL Energy Partners (NGL) were some of the biggest losers, while the Energy Select Sector SPDR ETF (XLE) tumbled 3.2%. 

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