The beginning of the trading week witnessed a global financial market slump, and Wall Street entered the fray as investors were concerned about increasing omicron variant infections, inflation, and other factors.

The Dow Jones Industrial Average dropped about 660 points, with Boeing The Boeing Company $BA: $188.48(-2.15%), Goldman Sachs The Goldman Sachs Group, Inc. $GS: $371.61(-2.67%) and American Express Company $AXP: $155.89(-2.57%) bleeding red. The S&P 500 plummeted 1.87% in the initial few hours of trading, mimicking similar drops of European and Asian markets. The technology-focused Nasdaq Composite was down by 1.6% in the initial trading hours, while Nasdaq 100 futures sank 1.6%. The small-cap benchmark Russell 2000 lost more than 2.5%.

Energy stocks also bled as U.S. oil prices plunged more than 5%. Devon Energy plummeted 6%, and ExxonMobil lost more than 2%. Benchmark Brent crude prices saw a fall of more than 3.5% to below $70 a barrel.

Financial stocks such as Goldman Sachs dropped nearly 4%, while Wells Fargo & Company $WFC: $46.85(-2.29%) slid over 3%. Also, JPMorgan JPMorgan Chase & Co. $JPM: $153.94(-1.80%) and Bank of America Corporation $BAC: $43.16(-1.64%) saw a fall of more than 2%.

Healthcare stocks like Novavax Novavax, Inc. $NVAX: $201.95(-7.07%) and Moderna Moderna, Inc. $MRNA: $276.38(-6.25%) were bleeding red, while Pfizer Pfizer Inc. $PFE: $61.02(2.59%) managed to be in the green zone.

Major European stock market indexes fell almost 1%. Most Asian markets ended in red, although the Shanghai Composite performed slightly better, benefitting from a Chinese interest rate cut. German stock index- DAX decreased 1.9%, French stock market benchmark CAC 40 dropped 152 points or 2.2 per cent, and Japan’s Nikkei 225 plunged 2.1%.

The increasing spread of the Omicron variant is inducing apprehensions about the possible lockdowns that could lead to disruptions in the supply chain and worsen inflation plus weigh on growth. The Omicron variant has been found in 43 out of 50 U.S. states and around 90 countries. The number of cases is doubling in 1.5 to 3 days in areas with local transmission, the World Health Organization (WHO) said on Saturday.

The fall in markets is “reflecting growing uncertainty surrounding whether the Omicron surge will bring new widespread economic shutdowns, an unexpected shelving of additional fiscal stimulus from President Biden’s Build Back Better plan, and a breach by the S&P 500 index of its 50-day moving average,” said Jim Paulsen, chief investment strategist at the Leuthold Group.

With the rising cases of the newly-found variant, the global leaders are bracing themselves up to fight against the virus by mulling over putting reasonable restrictions on businesses and social interactions ahead of the holiday.

The Dutch government announced a lockdown on Sunday, while the U.K. is mulling over the option to put a lockdown to curb the exploding cases of the virus. The Natural History Museum, one of London’s leading attractions, announced a one-week shut down because of “front-of-house staff shortages.”

“Even if booster shots are effective at reducing the medical risks, a rapid spread of Omicron could still overburden health systems and force countries to follow the Netherlands and adopt more economically damaging restrictions,” Berenberg chief economist Holger Schmieding wrote in a research note on Monday.

In the U.S, President Joe Biden issued “a stark warning of what the winter will look like for Americans that choose to remain unvaccinated,” the White House press secretary said over the weekend.

The impact of Omicron on the economy is unknown. Besides harming the economies by restricting the businesses, the omicron variant can drive inflation even higher. If it leads to locking factory gates, disrupting global supply lines, then already troubled operations might get much worse. Consumer prices released in November indicated the highest inflation in more than four decades, with a 6.8% inflation rate year over year. The final demand index surged 9.6 per cent over the previous 12 months ending in November, the highest since the annual data first calculated in November 2010.

Already, consumer prices reported in November marked the highest inflation rate in over four decades, summing up at 6.8% year over year.

“The rapidly spreading Omicron variant appears likely to lead to a transitory winter chill,” economists Lydia Boussour and Gregory Daco of Oxford Economics wrote in a research report last week. They say the Federal Reserve could find it a daunting task to find a panacea to cure an economic slowdown that clashes with high inflation.