U.S. stocks tumbled on Wednesday as huge sell-off was triggered by fears about the Italian debt crisis. All major indices shed more than 3 percent on Wednesday's close.

Although the news that Italian Prime Minister Silvio Berlusconi will resign after his government's new austerity budget is passed helped support the markets on Tuesday, the optimism had quickly gone as investors feared the uncertain Italian future.

The yield of Italian 10-year government bonds has surged to pass the critical 7 percent mark, which was widely seen as unsustainable. It is also reported that the European Central Bank began to buy Italian bonds in an effort to avert crisis for Italy and the eurozone.

Meanwhile, European Union officials said they have no plans in place for a financial bailout of Italy, raising doubts that Italy could avert deepening debt crisis on its own.

In Greece, talks about forming new government fell apart between the country's two major political parties, raising doubt about whether the country will be able to receive the next bailout fund it needs to avoid default.

The fear over Italy and eurozone triggered huge sell-off in stock market on Wednesday as Dow Jones Industrial Average shed more than 400 points in afternoon trading session. The CBOE Volatility Index, which is widely considered the best gauge of fear in the market, surged to above 36.

Amid all the uncertainties in Italy, China's October economic data came as a relief. The country's Consumer Price Index slowed by the most in almost three years to an annualized 5.5 percent in October from 6.1 percent in September.

The figure eased investors' concerns about China's inflation and also raised expectations of further easing monetary policy that will stimulate the economic growth.