Stocks plunged Monday as U.S. markets opened, as fears over China’s economy roiled global asset markets.
The Dow Jones Industrial Average tumbled as much as 1,000 points to start trading Monday, over 5 percent. That would have represented the largest one-day decline in the history of the index if it had held throughout the day.
The index later recovered roughly half those losses within the hour, and by late morning had pared its losses to just 350 points amid massive volatility.
Markets across Europe have also fallen sharply after the Shanghai Composite in China fell 8.5 percent Monday.
Chinese markets have been in turmoil since the central bank moved to devalue the yuan on August 11, a step that suggested that the Chinese government was concerned about the possibility of slowing economic growth.
As of the close of markets Monday, the Shanghai Composite was lower than it was at the start of the year, despite being up roughly 60 percent earlier in the summer.
Futures indicated a rout in U.S. markets Monday to follow a massive drop Friday. The Dow Jones Industrial Average fell by over 500 points to end the week, and all major indices were down over 3 percent as fears related to China cause a broad-based decline in stock prices.
The shaky stock market is expected to complicate the Federal Reserve’s decision on whether and when to raise interests rates, and the expectation of a rate hike is thought to be driving some of the sell-off.
