Chinese American depositary receipts tumbled 5.1 percent as of 12:42 p.m. in New York, extending their slump to 18 percent from this year's high. Alibaba Group Holding Ltd. tumbled to the lowest since its initial public offering, while JD.com Inc. sank as much as 12 percent.

"Investors are fleeing anything associated with China," Brendan Ahern, chief investment officer at Krane Fund Advisors LLC in New York, said by phone on Tuesday. "They don't want to have anything related to China in their portfolio. Investors are reading the risks around China, and there is a spillover effect in the U.S.-listed stocks."

Stocks fell in the U.S. after the Shanghai Composite Index sank for the fourth time in five days as government measures to stabilize mainland markets failed to stop a retail investor selling spree. Even after the median price-to-earnings ratio in China dropped to 55 from 108 at the height of the rally in June, valuations are more than twice as high as those on the Standard & Poor's 500 Index.