Energy companies led the decline as crude dipped below $50 a barrel Monday.
Other stocks also fell as traders worried that the drop could indicate a weaker global economy and possibly lead to a dangerous, wider drop in other prices in the economy.
The Dow Jones industrial average lost 331 points, or 1.9 per cent, to 17,501. It was down as much as 357 earlier.
The Standard & Poor's 500 fell 37 points, or 1.6 per cent, to 2,024. The Nasdaq fell 56 points, or 1.2 per cent, to 4,671.
In Europe, the euro sank to a nine-year low as traders worried that Greece might leave the currency union. European markets closed sharply lower.