Global markets trembled on Monday, with Asian markets plummeting sharply as the prospect of war in Ukraine grew. The major US indexes shook at the opening bell.

Wall Street is likely to see a continuation of the volatility that wiped 500 points off the Dow on Friday and has largely governed trading in 2022 as investors grappled with a slew of broader economic issues such as looming interest rate hikes, surging inflation, and ongoing supply chain disruptions.

The Biden administration’s and its Western allies’ diplomatic efforts over the weekend did little to alleviate fears that Russia was preparing to invade Ukraine. Asian markets closed in the red across the board, with Japan’s Nikkei 225 falling more than 2.2 percent and Hong Kong’s Hang Seng Index  sliding 1.4 percent.  In midday trading, all European indexes were lower, with France’s CAC40 down 2.6 percent and the benchmark Stoxx 600 index down nearly 2 percent.

Stocks on Wall Street fluctuated in the morning before turning negative. Around 10:45 a.m., the Dow Jones industrial average had fallen more than 300 points, or about.9%. The S&P 500 index fell about.6 percent, while the tech-heavy Nasdaq fluctuated between positive and negative territory. According to MarketWatch, all three indices are down 4% or more year to date.

“Investors are concerned that a physical conflict between Russia and Ukraine is about to break out,” Danni Hewson, financial analyst at AJ Bell, said Monday.  “If Russia goes to war with Ukraine, there is no telling how long the battle will last or how much damage will be done to the stock market.”

The Cboe Volatility Index was up more than 7% on Monday. According to MarketWatch, the so-called Wall Street fear gauge has risen more than 50% in the last month due to extreme volatility. Despite some gains last week, markets were sent reeling after the Labor Department reported the highest annual inflation spike since February 1982, fueling speculation that the Federal Reserve may act more aggressively than expected in raising interest rates.

Concerns are now colliding with concerns about the impact of the conflict with Russia on the global economy. President Biden warned over the weekend that if Russia attacked its neighbor, the US and its allies would respond “decisively and impose swift and severe costs.” Officials in the Obama administration insist that any allied response this time will be far harsher than the sanctions imposed following Russia’s 2014 takeover of Crimea.

Russia is one of the world’s largest oil producers, and a military or economic conflict with the country has the potential to cause significant disruption in energy markets and elsewhere. The threat of harsh financial sanctions, most likely aimed at Russia’s state-owned banks, is intended to deter a Russian invasion by emphasizing the risk of capital outflows, currency depreciation, and bank runs. Putin’s belligerence has already cost Russian investors: the benchmark RTS stock index is down about 25% since its late-October high.

According to Ivan Feinseth, chief investment officer at Tigress Financial Partners, while stocks have a long history of ignoring geopolitical tensions, most of them have been viewed as “easily contained by the US,” with little impact on global financial markets.

“However, President Biden has very little in his arsenal to deter Russia against any aggression other than economic sanctions and boycotts, which have proven futile in the past and are extremely difficult to enforce,” Feinseth said Monday.

Oil prices fell but remained high, despite warnings from US officials that Russia’s invasion of Ukraine could happen at any time. Brent crude, the international oil benchmark, was trading around $93.95 per barrel, down about.5%. The U.S. oil benchmark, West Texas Intermediate crude, was trading 0.3 percent lower, around $92.83.

Gold, a safe haven for investors in times of turmoil, continued to rise, despite being buffeted by the whirlwind of tensions. It increased by 1.43 percent to around $1868.60 per troy ounce.