The Nasdaq fell 2.4% - its biggest drop since April 2014 - to 4,876 on concerns that technology and biotech stocks have become overvalued.
The Dow sank 1.6% and the broader S&P 500 slid 1.5% after US durable goods orders unexpectedly fell in February.
Japan's Nikkei 225 and the broader Topix both fell 0.9% while South Korea's benchmark Kospi shed 0.6%.
In Australia, the benchmark S&P/ASX 200 fell 1.3% and is headed for its biggest fall in more than two weeks.
Over in China, the Shanghai Composite opened 0.5% in the red while Hong Kong's Hang Seng fell 0.35%.
Oil prices have rallied during Asian trade after Saudi Arabia, a major oil exporter, and its allies began airstrikes in Yemen, raising concerns on the disruption of supplies in the Middle East.
Brent crude rose by more than 2%, approaching $60 (Â£40) a barrel in Tokyo.
West Texas Intermediate crude futures , the US benchmark, also rose to trade at $51.55 a barrel.
"With Saudi beginning to bomb targets in Yemen, in an attempt to defuse a coup by Shiite rebels, the geo-political risk quotient in the Middle East has ratcheted higher," Vishnu Varathan from Mizuho Bank wrote in a report.
"If the strike morphs into a full-blown confrontation involving Iran, then oil will surge alongside gold and the US dollar while US treasury yields may be set for a renewed drop."
Shares of Ozner Water International rose by more than 15% following a five-week long suspension.
The Chinese water purification company had been accused of making "false and misleading representations" over its profitability by short-seller Glaucus Research last month.
The allegations caused Ozner's shares to lose a fifth of its value before it was halted from trade.
On Wednesday, Ozner addressed Glaucus Research's claims as "unfounded allegations" in a detailed statement to the Hong Kong stock exchange.
"We will not tolerate what seems to be an outright malicious attack on the company for personal gains which harms the company's reputation and business prospects," it said.
Asian stocks fell on Thursday following weak US economic data and a sharp selloff in US technology shares.