NEW YORK, New York - The rout on Wall Street extended on Monday with the Nasdaq Composite shedding more than 4 percent, the S&P 500 dropping more than 3 percent, and the Dow Jones industrials losing 2 percent.

"Markets are digesting the start of a return to a more normal monetary policy environment," Kristina Hooper, chief global market strategist at Invesco in New York told Reuters Monday.

"Moving more aggressively on rates raises the specter of a recession, especially with all of these complications - high inflation, Russia's invasion of Ukraine, and COVID-related supply chain disruptions," she said.

Taking the brunt of the falls, the Nasdaq Composite dived 521.41 points or 4.29 percent to 11,623.25.

The Dow Jones decelerated 653.67 points or 1.99 percent to 32,245.70.

The Standard and Poor's 500 fell 132.06 points or 3.20 percent to 3,991.28.

The U.S. dollar remained well bid, with the commodity currencies responding to widening fears of a global recession. The Australian dollar, which has strengthened the most in recent months, plummeted to 0.6955 around the New York close. The Canadian dollar was sharply lower at 1.3003. The New Zealand dollar sank to 0.6330.

The euro edged up to 1.0560 after again failing to fall below the crucial 1.0500 level. The British pound recovered to 1.2330 after falling below 1.2300 earlier. The Japanese yen remained soft but off its lows at 130.24. The Swiss franc was unwanted at 0.9932.

On overseas equity markets, the FTSE 100 in London shed 2.32 percent. The German Dax was down 2.165 percent. In Paris, the CAC 40 did worst of all, falling 2.75 percent.

In Japan, the Nikkei 225 dived 684.22 points or 2.53 percent to 26,319.34.

Australia's All Ordinaries index crumbled 109.70 points or 1.47 percent to 7,357.90.

In New Zealand, the S&P/NZX 50 fell 227.68 points or 1.96 percent to 11,381.70.

South Korea's Kospi Composite lost 65.92 points or 2.46 percent to 2,611.15.

The Hong Kong stock market was closed for a public holiday. China's Shanghai Composite, going against the trend, inched up 2.58 points or 0.09 percent to 3,004.14.