Devik Jain and Bansari Maiur Kamdar

(Reuters) -U.S. stock indexes plunged on Monday, with the S&P 500 on course to confirm a correction as the prospect of a Russian attack on Ukraine posed as a double whammy for investors already worried about aggressive monetary policy tightening by the Federal Reserve.

An index is considered to be corrected if it closes at 10% below its record level. It is currently down 11.3% compared to its Jan 3 record high.

All the 11 major S&P sectors declined, with seven of them sliding more than 3% each.

The index of small-caps, which is economically sensitive, fell 2.6%. This index fell as high as 20.9% since its peak on Nov. 8, indicating that it is now in a bear market.

NATO stated Monday that it would put forces on alert and reinforce eastern Europe with fighter jets and more ships in response to Russia’s military buildup at Ukraine’s borders.

The, which is a widely-watched gauge of investor anxiety in U.S. market, was at its lowest trading level since January 2021.

Gary Black (Managing Partner, Future Fund Active ETF) stated, “If it were Ukraine alone, people wouldn’t ignore it, but it is kinda icing on top today.”

It’s occurring at the same moment that people worry that the Fed will make a policy error and that (that’s just) adding to the uncertainty.”

On Wednesday, the Fed will conclude its policy meeting. The market will closely monitor how concerned the Fed is about rising inflation and how aggressively the U.S. central banks will try to control it.

Fed funds futures traders fully price in a 25 basis-point hike in March in addition to three rate increases in the year.

The stock market is off to a bad start for 2022. With the Nasdaq Index now falling 17.5% since its November close peak, prospects of faster tightening policy steps sparked a surge in Treasury yields which dealt a severe blow to Wall Street growth names.

At 12:18 pm. ET, the was down 1,078.86 points, or 3.15%, at 33,186.51, the S&P 500 was down 171.14 points, or 3.89%, at 4,226.80, and the was down 661.36 points, or 4.80%, at 13,107.56.

The 200-day moving median is the key technical level that market participants monitor. All major indexes trade below this mark.

Tesla (NASDAQ) Inc lost 8.3% in order to be the leader among mega-cap tech stocks.

“For many technology companies, multiples or valuations are certain high in a lot if they’re not delivered the earnings to justify it,” said Darren Schuringa (CEO of ASYMmetric Expensive ETFs) in New York.

Kohl’s Corp. (NYSE:) surged 31.6% following Reuters reporting that Sycamore Partners, a privately held equity firm is preparing a bid to buy the U.S. department shop. This comes days after a Starboard Value-backed consortium proposed a takeover.

For a ratio of 9.08 to 1 on the NYSE, and 5.37 to 1 on the Nasdaq, decliners outnumbered advances.

The S&P index recorded one new 52-week high and 29 new lows, while the Nasdaq recorded three new highs and 1,281 new lows.