The leading US stock market index closed down 4.6% at 24,345.75.
The White House said: "We're always concerned when the market loses any value but we're also confident in the economy's fundamentals."
The fall surpasses a previous record 777.68 points drop on the Dow Jones during the financial crisis in 2008.
That came after Congress rebuffed a $700bn bank bailout plan following the collapse of investment bank Lehman Brothers.
It is the largest fall in percentage terms since August 2011, when markets dropped in the aftermath of "Black Monday" when Standard & Poor's downgraded its credit rating of the US.
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