The Australian share market has suffered its worst day in more than four years, as fears mount the US economy will enter a recession.

The benchmark S&P/ASX200 index on Monday dropped 293.6 points, or 3.7 per cent, to 7,649.6 – its biggest single-day fall since May 2020.

That amounts to a loss of 5.81 per cent – or $160 billion – for the local bourse over the past two days of trading, after it finished 2.11 per cent lower on Friday.

The broader All Ordinaries dropped 311 points, or 3.81 per cent, to 7,859.4.

Not since March 2020, when markets were spooked by the outbreak of the COVID-19 pandemic, has the local bourse experienced such a vicious two-day sell-off.

“I think we’re in a fairly messy position here,” AMP chief economist Shane Oliver told Sky News.

Global markets were rattled after US non-farm payrolls data released on Friday showed unemployment jumped to a near three-year high of 4.3 per cent, triggering the Sahm rule recession indicator.

All 11 ASX industrial sectors were heavily in the red, with IT stocks leading the way down 6.6 per cent.

The Australian dollar was buying 64.08 US cents, from 65.25 US cents at Friday’s ASX close.