Dow sheds 335 points in biggest drop of 2014

NEW YORK (CNNMoney)

The Dow plunged 335 points on Thursday, its worst day of the entire year on a point basis.

October is shaping up to be a scary month for anyone with money in the market, but for now investors are just trying to catch their breath. Already this month, there have been five days with major market moves where the Dow has swung up or down more than 200 points. Wednesday -- mere hours ago -- was actually the best day of the year so far for stocks.

What's behind all of this volatility? Market moves aren't always logical, but it's clear that investors are growing increasingly nervous about the fate of the European and Chinese economies. And they don't know how that will change the Federal Reserve's plans to remove the easy-money punchbowl.

The violent swings in the market confused professionals and retail investors alike.

"Everyone who thought they were in the clear yesterday walked in today and got punched in the face," said Michael Block, chief strategist at Rhino Trading Partners. "Just when you think have it figured out, you don't. This is a very tough market."

Jitters about Europe's slumping economy were amplified by new numbers revealing German exports shrank dramatically in August. Investors are now losing sleep over the threat that Germany -- Europe's economic engine -- could slip into a recession.

CNNMoney's Fear & Greed Index is now flashing "extreme fear," compared with just run-of-the-mill "fear" a month ago. The wild market moves are also reflected in the VIX volatility index, which spiked 21% on Thursday.

"The only thing I'm currently bullish on is volatility," said Stocktwits user shogunofharlem78 wrote.

Related: Are stocks a trick or treat?

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Dow sheds 335 points in biggest drop of 2014