A bruising stock selloff continued Monday, erasing more than 650 points from the Dow Jones Industrial Average, as Treasury Secretary Steven Mnuchin tried to instill calm into a jittery market.
Coming off the stock market's worst week since the 2008 financial crisis, the Dow Jones Industrial Average, S&P 500 and Nasdaq Composite fell for a fourth straight session as investors continued to weigh the impact of rising interest rates, slowing U.S. growth and the ramifications of a government shutdown extending into January.
Monday's 2.9% drop during the shortened trading day was the Dow industrials' worst performance ahead of the Christmas holiday, trumping a 1918 record.
With the selloff showing little signs of slowing, Mr. Mnuchin attempted to reassure investors, saying he had spoken individually with the chief executives of six large banks to ensure they had sufficient lending capacity.
But Mr. Mnuchin's public efforts to soothe investors may have had the opposite effect, analysts said, with bank stocks falling along with most other assets Monday.
"We've gone through situations before where it's absolutely normal for the secretary of Treasury to reach out to the private sector," said Quincy Krosby, a chief market strategist at Prudential Financial, who also served several stints in the government earlier in her career.
"But what's bad is this made the papers, and says the government is very worried," said Ms. Krosby, 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."
Adding to the market's unease were reports over the weekend that President Trump, angry over monetary policy, has considered removing Federal Reserve Chairman Jerome Powell -- a move that would stir even greater volatility and raise questions around political inference at the central bank, analysts said.
White House advisers, including Mr. Mnuchin, sought to ease those concerns as well, saying the president doesn't have the authority to remove Mr. Powell.
But Mr. Trump injected his own view on the matter on Monday, taking to Twitter to call out the Fed as being the economy's "only problem," likening the central bank to a "powerful golfer who can't score because he has no touch."
The Dow, which had been trading off its lows of the session, slumped following the tweet.
Thin trading volumes aren't helping matters, analysts added, and can contribute to bigger-than-normal price swings. Trading desks are usually lightly staffed in the final week of the year, with the market open half of the day on Christmas Eve and closed for all of Christmas.
The Dow Industrials fell 653.17 points, or 2.9%, to 21792.20 to notch its biggest four-day decline since 2015, while the S&P 500 slipped 65.52 points, or 2.7%, to 2351.10, putting it less than half a percentage point away from entering a bear market.
The Nasdaq Composite also fell, shedding 140.08 points, or 2.2%, to 6192.92 after closing more than 20% below its recent high to enter bear-market territory on Friday.
All 11 major S&P 500 sectors traded lower, from riskier assets such as shares of fast-growing technology companies to the market's safer corners, like dividend-paying utilities.
Bank stocks broadly fell in the wake of Mr. Mnuchin's comments, with the KBW Bank index of the U.S.'s biggest lenders shedding 2.1%. The index has fallen 20% over the past month, on pace for its biggest monthly pullback since 2009.
The ongoing fall in oil prices also hurt stocks Monday. Crude oil prices slumped more than 4% to $43.71 a barrel, extending the commodity's decline in recent months. Simultaneously, shares of energy companies fell 4% in the S&P 500.
Some investors remain bullish about growth in the U.S. continuing next year, pointing to positive economic data, even though the Fed ignored Mr. Trump's calls for easy monetary policy and raised rates last week.
"People are struggling to look past the immediate actions of the Fed," said Robin Creswell, managing principal at Payden & Rygel Investment Management.
"For those who can take a longer view and for those who are less focused on their day-to-day balance-sheet needs or their regulatory capital needs, the underlying position is not much changed," he added.