The rising geopolitical tensions kept financial markets on edge, pulling the S&P 500 into a correction — Wall Street speak for a drop of at least 10% from its recent peak — for the first time in more than three years.
The Dow Jones Industrial Average and Nasdaq composite also lost more than 1%.
The latest losses come as investors closely watched the crisis in Ukraine a day after Russia recognized the independence of several regions in Eastern Ukraine and decided to send in forces.
The Federal Reserve plans on raising interest rates to combat inflation, but Wall Street is uncertain about how the number of rate hikes and their frequency will impact the broader market and economy.