Stocks dropped in midday trading on Monday, a shortened trading day, after attempts by the U.S. Treasury secretary to reassure markets initially unsettled investors instead.
Market watchers, still reeling from interest rate fears, also digested a weekend of continued Washington drama.
"We have this constant barrage of bad news coming out of D.C.," said John Lynch, chief investment strategist for LPL Financial. "Investors' nerves are raw."
The Dow Jones Industrial average slid 433 points, or 1.93 percent, to 22,012. The Standard & Poor's 500 dropped 40 points, or 1.67 percent, to 2,376.
The tech-heavy Nasdaq, which fell into official bear territory on Friday, lost 53 points, or 0.84 percent, to 6,280 in midday trading. The Russell 2000, an index of small-company stocks that's also in a bear market, fell 4 points, or 0.31 percent, to 1,288.
A bear market is when an index falls 20 percent or more from its most recent high.
On Sunday, Treasury Secretary Steve Mnuchin announced that he had called the chief executives of the six biggest U.S. banks to ensure they had enough liquidity to operate normally.
Mnuchin also plans a call Monday with the president's Working Group on Financial Markets, which includes Federal Reserve and Securities and Exchange Commission officials.
The moves come after Trump reportedly discussed firing Federal Reserve Chairman Jerome Powell, blaming the recent turmoil in the stock market on the central bank's Wednesday hike of a benchmark interest rate and its rate outlook for next year. Trump reiterated his displeasure with the central bank in a tweet on Monday.
"There is misunderstanding between what the Fed is doing and what markets expect," Lynch said. "People were counting on one or no hikes next year and the Fed came out with two."
Also adding to market uncertainty was the partial shutdown of the federal government on Friday at midnight after President Trump and lawmakers couldn't come up with a temporary funding bill.
Trump refused to sign a bill Thursday because it didn't include money for a border wall. A new bill, including $5.7 billion in border funding that Democrats oppose, was dead on arrival in the Senate. It appears the impasse could last until after the New Year.
The market closes at 1 p.m. ET today, is closed on Tuesday and will reopen with regular trading hours for the rest of the week. It is again closed on New Year's Day.
