My nephew does a similar thing, he's 3 1/2. At the moment I deal with it by picking him up and holding him tight - I do this because he has a tendency to hit whatever is around, be it his brother or a brick wall, and I don't want him hurting himself or others. So I pick him up and cuddle him tight for a while. Yes, he objects to it, and yes, he hits me for a minute or so. But then he calms down, and cuddles into me and just cries for a little while, letting out the extra emotion. We go and sit in a quiet, dark room, and more often than not, once he calms down, he falls asleep. Lately this has led to him recognizing that he's getting overwrought, because he'll come up to me and demand cuddles and bed.

Could he have a timeout type thing, not as a punishment, but just to give him some space and quiet time? Does he have his own bedroom that he can go to?