US stocks plunged during a highly volatile day of Wall Street trading with the Dow Jones falling by more than 1,150 points, erasing all the gains it has made for the year.
At the end of a rollercoaster day, the Dow Jones Industrial Average fell by 1,175.21 points, or 4.6%, to 24,345.75.
At one point, the Dow fell 6.3 percent or 1,597 points, as it breached both the 25,000 and 24,000 levels during trading.
Fears of interest rate rises in the US in an effort to keep inflation under control are making markets nervous.
The S&P 500 and Nasdaq indices, both key benchmarks of Wall Street, were also down considerably.
Stocks close down more than 4 percent, the biggest drop since 2011; Dow falls 1,179 points https://t.co/QawhgmQuSMpic.twitter.com/BT7WIOkHw3
The decline followed months of market increases, which had fuelled concerns that share prices were over valued.
The Dow’s biggest point loss until now was a 777-point drop in the global economic crisis of September 2008.
The stock market has climbed to record peaks since President Donald Trump’s election and remains up 23.8% since his victory.
Unlike many if his predecessors, Trump has frequently touted the rise of the stock market during his presidency.
As the stock market fell on Monday, the White House said the fundamentals of the US economy are strong.
London’s main share index, the FTSE 100, had earlier closed down 1.46%, and the biggest markets in Asia fell between 1% and 2.5%.
Many investors have been bracing fora backdraft for months, as the stock market has reached record high after record high with investors encouraged by solid economic data and prospects of corporate profits, the latter bolstered by recently passed tax cuts.
Friday’s January jobs report sparked worries over inflation and a surge in bond yields, as well as concerns that the Federal Reserve will raise rates at a faster pace than expected.