U.S. markets plunged Monday as China said it would raise steep tariffs on $60 billion in U.S. goods, upping the stakes of a trade war that threatens to imperil the global economy.

The Dow Jones industrial average closed down 617 points, or nearly 2.4 percent, as investors feared that the standoff with China would escalate into a full-blown economic crisis — tipping the U.S. and world economies into recession. Dragging the Dow were Apple, Caterpillar and Boeing, with drops of 5.9 percent, 4.3 percent and 4.8 percent respectively. The blue-chip index slumped to its lowest close since January.

“Investors have reassessed the trade issue,” said Howard Silverblatt of S&P Dow Jones Indices. “They weren’t factoring enough risk into it.”

The Standard & Poor’s 500-stock index was down 2.4 percent, holding just above a key threshold of 2,800. The tech-heavy Nasdaq Composite was off 3.4 percent, its worst day of the year. Ten of 11 market sectors landed in negative territory. Utilities was the only bright spot.

Technology stocks took a hit Monday, with all five FAANG stocks — Facebook, Apple, Amazon, Netflix and Google parent Alphabet – deeply in the red.

Commodity futures in U.S. soybeans, the largest U.S. export to China, and copper, a predictor of the global economy, both fell to lows on trade fears.

“Today’s tit-for-tat in U.S./China trade tariffs has exacerbated tumbling futures out of fear that tensions could trigger a global recession,” said Sam Stovall, chief investment strategist at CFRA Research.

The drama began last week after President Trump imposed a 25 percent tariff on $200 billion in Chinese imports to the United States. He also told aides to begin plans to hit more than $300 billion in other Chinese goods.

Asian markets were down more than 1 percent on China’s response, with the Shanghai Composite dropping 1.2 percent and Japan’s Nikkei 225 down just shy of 1 percent. European markets were down across the board, with the German Dax leading the drop, off 1.5 percent. France’s CAC had fallen 1.2 percent and the Pan European Stoxx 600 was off 1.2 percent.

Adding to the pressure on stocks was a Saudi news report that said two Saudi oil tankers had been attacked with “significant damage” in coastal waters near the Persian Gulf, heightening tensions with Iran.

The tankers were subjected to an “act of sabotage” early Sunday morning off the coast of the United Arab Emirates, according to a statement from Khalid Al-Falih, the Saudi minister for energy, industry and mineral resources, carried by the official Saudi news agency.

Saudi Arabia did not say who was responsible for the apparent attack, which caused no casualties or oil spill, according to the statement.

Oil futures initially climbed on the news, with U.S. benchmark West Texas Intermediate advancing 1.6 percent and Brent crude up nearly 2 percent. Both benchmarks had reversed and oil prices declined by end of trading.

“Stock investors are in risk-off mode as Trump’s trade war with China seems to be escalating while negotiations seem to be breaking down,” said Ed Yardeni, president of Yardeni Research. “Adding to the geopolitical tumult is mounting tension in the Middle East following the sabotaging of Saudi oil tankers over the weekend.”

John Kilduff of Again Capital said that, at least for now, the concerns about Iran are taking a back seat to the fear that the trade salvos between the United States and China could ultimately lead to a reduction in world oil demand.

“Trade fears are overwhelming oil markets and sending prices down,” Kilduff said. “Markets are worried that the demand side of the oil trade will take a hit from tariffs and a slowdown in world economies.”

The president has alleged that the Chinese government is ripping off U.S. consumers and businesses by unfairly subsidizing Chinese companies, stealing intellectual property from U.S. firms, and flooding global markets with cheap goods to put other companies out of business.

On Monday, he warned China against retaliation in a series of tweets. But China countered with its own tariffs. The Chinese government said it would impose levies on U.S. imports starting June 1, with the steepest penalties affecting certain beef, live plants, dyed flowers, and a range of fruits and vegetables. The tariffs would range from 5 percent to 25 percent.

Technology stocks took the brunt of the pain. Apple shares were off 6 percent because of the risk a China trade war could have on Apple revenue in that country. The shares also were reacting to a Supreme Court ruling Monday that allows iPhone users to sue the phone giant over prices at its App Store.

Shares for Uber Technologies, another high-profile technology company, fell $3, more than 7 percent, Monday in its second day of trading. The ride-hailing company debuted Friday at $45 per share. Shares in the company, which is the most anticipated initial public offering of the year, are 17 percent off their opening price.

Monday’s skid comes on the heels of the first weekly decline of 2019 in U.S. stocks.

The S&P 500 eked out a gain Friday on speculation that the escalation wouldn’t derail global economic growth, paring its loss for the week to 2.2 percent. That’s the steepest drop since the five days ended Dec. 21, when stocks were tumbling toward the brink of a bear market. The Dow Jones industrial average dropped 2.1 percent, to 25,942. Apple had one of the biggest declines in the 30-member gauge as the iPhone maker’s close ties to China put its profits at particular risk. The Nasdaq Composite Index fell 3 percent.

The sell-off started last Monday after Trump’s weekend tweets threatening to more than double tariffs on $200 billion in Chinese goods, which he then followed through on. Equities staged a late-day comeback Friday on renewed optimism that an all-out trade war can be averted.

Stocks in all 11 major industry groups ended lower last week, with technology and industrial companies sinking the most as Beijing promised to retaliate against the fresh U.S. tariffs.