The Dow Jones Industrial Average plunged 2,046 points shortly after the opening bell Monday and the S&P 500 fell 7.4 percent, triggering an automatic halt to trading of all shares as oil prices plunged.

By early afternoon, the market had clawed back some losses, but the Dow remained down 1846.24 points and the S&P 500 remained down 7.1 percent. Nasdaq was down 6.14 percent.

Investors sought safety in government bonds, sending yields to new lows.

The yield on the 10-year US Treasury note fell to 0.577 percent. The 30-year note dipped below one percent and recently hit 1.003 percent. Bond yields and prices move in opposite directions.

Gold, another safe haven, rose 90 cents, or 0.03 percent, to $1672.90 an ounce.

Saudi Arabia launched a price war with Russia and the oil-production countries try to grab market share during the downturn. Brent crude, a worldwide benchmark, fell $9.57, or 21.07 percent, to $35.73 a barrel.

Major US oil companies were caught in the downdraft. Shares of Chevron and Exxon Mobil fell.

On Saturday, Saudi Arabia cut its price for crude oil selling in April, a reversal from previous efforts to support the market as the coronavirus cut worldwide demand. Saudi Arabia took the action after OPEC talks fell apart Friday. The result could be a glut of oil, further eroding prices.

"Crude has become a bigger problem for markets than the coronavirus," Adan Crisafulli, founder of Vital Knowledge, told CNBC. "It will be virtually impossible for (the S&P 500) to substantially bounce (back) if Brent continues to crater."

The Federal Reserve announced an emergency half-point cut in interest rates last week and may cut rate again when it meets March 17-18. Some expect the Fed to trim as much as another three-quarters of a point from the newly lowered rate of 1 percent to 1.25 percent.

On Monday, the New York Fed said it will boost the amount of money offered to banks for short-term funding needs to $150 billion from $100 billion.

Monday's drop in the S&P 500 was a jolt, but far from the record 20.5 percent plunge on October 19, 1987.