U.S. stocks posted steep losses on their first trading day of 2016. The Dow Jones Industrial Average plummeted 276 points, or 1.58 percent, to end the session.
Earlier today, the Dow lost more than 450 points at one point.
The S&P 500 closed down 31 points, or 1.51 percent. The Nasdaq declined 104 points, or 2.09 percent.
Today's activity does not bode well for the year, with traders referring to the axiom "As January goes, so goes the year."
Investors were spooked when China's Shanghai Composite Index fell 7 percent over weaker-than-expected manufacturing data and a falling currency.
Trading in China had to be halted earlier today and Chinese stocks are now at their lowest level in three months.
The violent attacks on the Saudi Arabian embassy in Tehran over the weekend has also rocked global markets this morning.
Steven Wieting, chief investment strategist for Citi Private Bank, told ABC News that timing had a significant role to play in the extent of this morning's carnage.
"In a market that has a lack of participation around holidays, market movements tend to be exacerbated and exaggerated," Wieting said. "It doesn't take a lot of volume to move the market."
On top of that, the circuit breaker system used in China may have also increased the speed of the drop, as investors likely felt pressured to quickly take out their money before stocks fell further.
"As these levels are approach," Wieting said, "you see a certain panic about liquidity. Those who want to sell want to do it before others so that they are not prevented from doing it...so circuit breakers like this in some ways could exacerbate short-term selling."
Citigroup predicts the Chinese economy will taper off gradually in 2016 and, as a result, present a risk for investors.
As for the U.S. economy, Citi expects the unemployment rate to continue falling because of slow growth.
Global real GDP growth will come in around 2.25 percent in 2016, Citi said in a market note.