The New Zealand sharemarket dropped about 2 per cent in the opening minutes of trade after an extremely volatile session on Wall Street.

By 10.05 am the NZX-50 index was down 163 points or 1.98 per cent at 8078.6.

The market was closed on Tuesday for Waitangi Day but dropped by 2 per cent on Monday.

Financial markets have been in turmoil since late last week, when US jobs data suggested inflation may finally be on the move in the world's biggest economy.

On Wall Street the Dow Jones Index went through a 1000-point range in extremely volatile US trading, which fed through to all major share markets overnight.

US markets began recovering this morning. Just after 10am New Zealand time, the S&P 500 was up 1.6 percent, the Dow Jones Index had gained 2.3 percent, and the NASDAQ 100 had risen 2.4 percent.

Having ended 2017 at 8,398.08, the NZX50 has now dropped 3.7 percent in 2018. However, it hit a record 8,455.55 on Jan. 5 and has booked consecutive gains for the past 13 months, meaning it's up 14 percent from this time a year ago when it closed at 7067.05.

"We've gone through a period of no volatility at all, so the daily movements have been minuscule in terms of percentages. We've now had this trip up and things are unwinding a bit," said Craig Stent, executive director and head of equities at Harbour Asset Management. "We have had a good run, we had a good year last year - it's not just a straight line up all the time.

"The bond yields have moved up, and when that happens you can see a bit of a pause in equity markets," Stent said. "It's not like anyone is really expecting a recession. Global data and economic activity are still pretty strong, but we are seeing an unwind of quantitative easing and gradual increase in interest rates globally. We're probably not going to see that locally because CPI is still contained and the Reserve Bank is in no rush to raise rates here."

Matt Goodson, managing director at Salt Funds Management, advised taking a longer-term view at the market rather than focusing on short-term losses.

"To put it into context, the US market is only back to where it was in mid-December," he said.