By Yasin Ebrahim

Investing.com – The S&P 500 slipped further into the red Monday, amid a jolt of volatility that swept through the market as investors mulled the broader implications of a liquidity crisis at China Evergrande Group.

The fell 2%, the slipped 2%, or 766 points, the Nasdaq fell 2.6%.

China Evergrande Group, the second largest property company in China, has more than $300 billion in liabilities, and reports suggest it won’t hit an interest payment deadline on its offshore bonds due Thursday.

The Chinese property company could go bankrupt if it fails to pay its debts. This could lead to a larger liquidity crisis, which some worry could cause a global economic crisis and harm global growth.

The – Wall Street’s so-called fear gauge – surged more than 30% in a sign that investors are growing nervous about the spillover of a economic crisis in China at time when Beijing has been cracking down on debt in sectors such as real estate.

“The source of the angst is ongoing worries about the broader implications of worsening developments at the beleaguered China Evergrande Group  […] reports that more companies in the property sector might be prospective targets for Beijing’s regulators,” Daiwa Capital Markets said in a note.

Oil prices plunged due to fears of a potential Chinese economic crisis. This was the biggest energy buyer.

Devon Energy (NYSE:), APA (NASDAQ:), Hess (NYSE:) led the declines to the downside in energy.

Financials, meanwhile, were dragged lower by falling bank stocks amid a slump in U.S. Treasury yields, with Citigroup (NYSE:), Fifth Third Bancorp (NASDAQ:), and SVB Financial (NASDAQ:) nursing heavy losses.

Tech also participated in the broad-based selloff as investors appeared to take a breather from the ‘buy the dip’ mentally ahead of the Federal Reserve’s two-day meeting starting Tuesday.

Google’s parent Alphabet (NASDAQ) fell over 1%, as did Apple (NASDAQ), Facebook (NASDAQ), Amazon (NASDAQ), and Microsoft (NASDAQ).

However, the decline in travel stocks was largely offset by airlines easing restrictions.

According to the White House, Monday’s announcement by the White House stated that travel restrictions will be eased for international travelers who have been vaccinated against Covid-19.

American Airlines (NASDAQ :), United Airlines NASDAQ :, and Delta Air Lines NYSE : traded above the flatline.