NEW YORK CITY, RAW – Wall Street’s main indices have fallen sharply, with the Nasdaq Composite confirming it was in a bear market, as the prospect of a ban on oil imports from Russia sent crude prices soaring and fuelled concerns about rising inflation.

Nasdaq ended down 20.1 per cent from its November 19 record high close, confirming the tech-heavy index has been in a bear market since hitting that record high, according to a widely used definition. That marks the Nasdaq’s first bear market since 2020, when the coronavirus outbreak crushed global economies.

The Dow Jones Industrial Average ended down 10.8 per cent from its January 4 closing record high, confirming it was in a correction. A correction is confirmed when an index closes 10 per cent or more below its record closing level.

Oil prices jumped to their highest levels since 2008 as the United States and European allies considered banning Russian oil imports, in response to the country’s invasion of Ukraine, while it looked less likely that Iranian crude would return swiftly to global markets.

Russia calls the campaign a “special operation”.

Energy shares, the standout S&P 500 group so far this year, was one of the only sectors logging a gain on Monday.

“That concern on oil has led to concerns on higher inflation and potential for stagflation,” said Mona Mahajan, senior investment strategist at Edward Jones.

“I think there is just a broader concern that there may be a hit to growth from the consumer given higher prices at the pump.”

The Dow Jones Industrial Average fell 797.42 points, or 2.37 per cent, to 32,817.38, the S&P 500 lost 127.79 points, or 2.95 per cent, to 4,201.08 and the Nasdaq Composite dropped 482.48 points, or 3.62 per cent, to 12,830.96.

Amazon, Microsoft and Apple were among the top individual drags on the S&P 500 while the financials sector fell 3.7 per cent. The utilities sector , one of the defensive areas of the stock market, gained 1.3 per cent.

Ukrainian officials said a bread factory had been hit by a Russian air strike as the country’s negotiators assembled for talks with Russian officials after previous rounds that brought no respite in the conflict.

Steep declines in shares of United Airlines Holdings Inc and Norwegian Cruise Line Holdings were among a broad downswing in travel and leisure stocks as the jump in oil prices threatened to disrupt a nascent recovery.

Stocks have struggled to start 2022 as concerns about the Russia-Ukraine crisis have deepened a sell-off initially fuelled by worries over higher bond yields as the Federal Reserve is expected to tighten monetary policy this year to fight inflation.

Investors are waiting for a US consumer prices report on Thursday, with the Fed widely expected to hike rates later this month to combat surging inflation.