Tuesday's losses were the equivalent of the Bush administration's bailout package to rescue the country's financial system, approved by Congress last week.
This month's total loss is around $2.2 trillion.
The Dow Jones industrial average dropped 508.39 points, or 5.1%, to close at 9,447.11. It has now lost more than 1,400 points over the past five sessions, or nearly 13% of its total value.
The point decline is the largest five-day drop ever, and the biggest five-day percentage drop since the September 11, 2001 terrorist attacks.
Federal Reserve Chairman Ben Bernanke spoke of the "historic dimensions" of the current crisis.
He also indicated that the central bank may cut interest rates to boost the economy.
U.S. President George W. Bush urged industrialized countries to work together to tackle the worldwide credit crunch.
In Russia, opposition parties and trade union leaders said on Tuesday said that the country's economy was on the brink of a crisis, criticizing the government and calling for urgent action.
Russia's financial system has been badly affected by the global economic crisis, with record losses on its financial markets, rising interest rates, and a liquidity shortage.
At a Kremlin meeting on Tuesday, President Dmitry Medvedev pledged to give banks extra 950 billion rubles ($36 billion) in credit for terms of at least five years to support the financial sector.
The move followed an almost 20% plunge on the Russian stock market on Monday.
