Updated at 6:40 a.m. ET
The stock market was only open for half a day Monday, and that was more than enough time for the Dow Jones Industrial Average to drop 2.9 percent to 21,792.20, breaking 1918's record for the worst Christmas Eve performance.
Other U.S. indexes fell too. The Nasdaq lost 2.2 percent to 6,192.92. The Standard & Poor's 500 index fell 2.7 percent to 2,351.10.
U.S. stocks are on track for their worst year since 2008, which was during the Great Recession, and their worst December since 1931, which was during the Great Depression.
The markets have been dealing with concerns of a slowing global economy, the trade dispute with China and last week's interest rate increase — the fourth by the Federal Reserve this year.
Over the weekend, reports surfaced that President Trump was asking advisers if he could legally fire Fed Chairman Jerome Powell. Trump nominated Powell last year to take over the Fed, but since interest rates began rising, Trump has upped his rhetoric against Powell.
Today I convened individual calls with the CEOs of the nation's six largest banks. See attached statement. pic.twitter.com/YzuSamMyeT
— Steven Mnuchin (@stevenmnuchin1) December 23, 2018
Efforts by Treasury Secretary Steve Mnuchin on Sunday to reassure investors backfired. He tweeted that he had spoken with the heads of the nation's six largest banks and was assured that they had sufficient lending capacity.
"We've gone through situations before where it's absolutely normal for the secretary of Treasury to reach out to the private sector," Quincy Krosby, a chief market strategist at Prudential Financial, told The Wall Street Journal.
"But what's bad is this made the papers, and says the government is very worried," Krosby told the paper, adding that with investors focused on so many issues, "it's almost as if gravity is pulling this market toward a lower level before it bottoms out."
Monday morning's drop in U.S. financial markets began after Trump tweeted about the Fed.
"The only problem our economy has is the Fed," the president said on Twitter. "They don't have a feel for the Market, they don't understand necessary Trade Wars or Strong Dollars or even Democrat Shutdowns over Borders. The Fed is like a powerful golfer who can't score because he has no touch - he can't putt!"
The Fed is an independent agency. While board members are nominated by the president, they make decisions separately from the White House.
Peter Conti-Brown, a financial historian at the Wharton School of the University of Pennsylvania, told The Associated Press: "We've never seen anything like this full-blown and full-frontal assault. This is a disaster for the Fed, a disaster for the president and a disaster for the economy."
After Monday's Wall Street losses, Asian markets followed. Japan's Nikkei 225 fell by 5 percent to end the day at 19,155.14 points. The Shanghai Composite Index ended 0.9 percent lower to 2,504.82. Benchmarks in Thailand and Taiwan also declined.
Markets in Europe, Hong Kong, Australia and South Korea were closed for Christmas.
After a pause in trading for the holiday, U.S. markets reopen Wednesday.
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