NEW YORK (AP) - The Dow Jones industrial average plunged 1,175 points, or 4.6 percent, erasing its gains for the year.
The Dow's drop Monday was its biggest in terms of points, but it had a larger percentage drop as recently in 2011.
The Dow is down 8.5 percent from the record high it hit in late January.
The slump began Friday as investors worried that higher inflation and interest rates could derail the long-running rally.
At one point the Dow was down as much as 1,600 points.
The Dow ended at 24,345.
The Standard & Poor's 500, the benchmark for many index funds, fell 113 points, or 4.1 percent, to 2,648. The Nasdaq fell 273, or 3.8 percent, to 6,967.
Bond prices rose. The yield on the 10-year Treasury fell to 2.73 percent.
The stock market has been unusually calm for more than a year. The combination of economic growth in the U.S. and other major economies, low interest rates, and support from central banks meant stocks could keep rising steadily without a lot of bumps along the way. Experts have been warning that that wouldn't last forever.
David Kelly, the chief global strategist for JPMorgan Asset Management, said the signs of inflation and rising rates are not as bad as they looked, but after the market's big gains in 2017 and early 2018, stocks were overdue for a drop.
"It's like a kid at a child's party who, after an afternoon of cake and ice cream, eats one more cookie and that puts them over the edge," he said.
As bad as Monday's drop is, the market saw worse days during the financial crisis. The Dow's 777-point plunge in September 2008 was equivalent to 7 percent, about twice as big as Monday's decline.
Stocks haven't suffered a 5 percent drop since the two days after Britain voted to leave the European Union in June 2016. They recovered those losses within days.
The market hasn't gone through a 10 percent drop since early 2016, when oil prices were plunging as investors worried about a drop in global growth, which could have sharply reduced demand. U.S. crude hit a low of about $26 a barrel in February of that year.
Wells Fargo sank $5.71, or 8.9 percent, to $58.36. Late Friday the Fed said it will freeze Wells Fargo's assets at the level where they stood at the end of last year until it can demonstrate improved internal controls. The San Francisco bank also agreed to remove four directors from its board.