NEW YORK, New York - Global stock markets dived on Monday as fears of an escalation in Covid-19 will swamp the recently emerging economic recovery.
Indicative of the loss in confidence was a six percent drop in the price of oil.
Safe-haven currencies, the U.S. dollar, Japanese yen, and Swiss franc shot higher.
Concerns over rising inflation which have gripped markets in recent weeks continue to take hold, despite concerns now for the economy.
On Monday U.S. President Joe Biden admitted inflation was a challenge and would be met by his administration. He said he had also instructed the Federal Reserve to take whatever steps are necessary to shore up the economy.
"I want to be clear, my administration understands that were we ever to experience unchecked inflation in the long term, that would pose a real challenge for our economy," he said.
"While we're confident that isn't what we're seeing today, we're going to remain vigilant about any response that is needed."
"The Fed is independent. It should take whatever steps it deems necessary to support a strong, durable economic recovery," Biden added.
The Dow Jones was down around 1,000 points at one stage but rallied towards the close. The benchmark index still ended down725.81 points or 2.09 percent at 33,962.04.
The Standard and Poor's 500 sank 68.64 points or 1.59 percent to 4,258.52.
The tech-laden Nasdaq Composite slumped 152.25 points or 1.06 percent to 14,274.98.
The U.S. dollar starred on foreign exchange markets flooring the British pound, which fell to a five-month low. It last changed hands on Monday, towards the New York close, at 1.3666. The euro slumped to 1.1797. The Canadian dollar was unwanted at 1.2750. The Australian dollar continued its recent descent to slip to 0.7335. The New Zealand dollar was sharply lower at 0.6931.
The Japanese yen, and Swiss franc, no doubt due to their safe-haven status, made modest advances to 109.51 and 0.9182 respectively.
Overseas, the FTSE 100 in London dropped 2.34 percent. The Dax in Germany shed more than 400 points to close down by 2.62 percent. The Paris-based CAC 40 lost 2.54 percent.
On Asian markets, the Hang Seng in Hong Kong tumbled 514.90 points or 1.84 percent Monday, to close at 27,489.78.
In Japan, the Nikkei 225 plummeted 350.34 points or 1.25 percent to 27,652.74.
The Australian All Ordinaries shed 71.00 points or 0.93 percent to 7,559.70.
China's Shanghai Composite finished flat, down just 0.18 of a point or 0.01 percent at 3,539.12.