US stock markets plunged more than 2.2%, even more notable after their most brutal week since 2008. European markets also slumped.

Treasury Secretary Steve Mnuchin's call with the heads of six major US lenders Sunday was a bizarre attempt to stem brutal recent losses in markets. It backfired.

Fears that the US government shutdown could continue into January, and Trump's suggestion that he aims to fire Fed Chairman Jerome Powell, have hit market confidence.

Investors balked at chaos in the White House on Christmas Eve after the most brutal week for US markets in a decade, wading through thin trading and early exchange closures before signing off for the holiday.

US markets were hit hard Monday, with selling intensifying into the close. The S&P 500, Dow Jones Industrial Average, and Nasdaq all fell at least 2.2%. The Dow was hit the hardest, losing about 2.85%, or more than 640 points.

Monday's selling produced the steepest losses ever on Christmas Eve for both the Dow and S&P 500, and has both on track for a loss of more than 11% this year, their worst since the financial crisis.

Traders on the floor of the New York Stock Exchange on December 24, 2018. AP Photo/Seth Wenig

It wasn't any one thing that sparked the selling; instead, investors seem to be grappling with a list of concerns.

They're stunned by Treasury Secretary Steve Mnuchin's strange call to bank CEOs. Mnuchin just shocked the market by invoking alarming crisis-era language in describing it. Mnuchin is set to convene with a crises team of government banking and finance officials on Monday after a bloody month for US markets. Last week, the Dow fell by nearly 7%, showing the worst weekly average since 2008.

Mnuchin just shocked the market by invoking alarming crisis-era language in describing it. Mnuchin is set to convene with a crises team of government banking and finance officials on Monday after a bloody month for US markets. Last week, the Dow fell by nearly 7%, showing the worst weekly average since 2008. They're worried about the Fed. White house advisers, including Mnuchin, reportedly convinced President Donald Trump that he lacks the authority to fire Federal Reserve Chairman Jerome Powell. In what would have been an astonishing break for an independent Fed, Trump had asked aides whether he could fire him, presumably in retaliation for raising rates for the fourth time under his leadership.

White house advisers, including Mnuchin, reportedly convinced President Donald Trump that he lacks the authority to fire Federal Reserve Chairman Jerome Powell. In what would have been an astonishing break for an independent Fed, Trump had asked aides whether he could fire him, presumably in retaliation for raising rates for the fourth time under his leadership. They're weighing the end of one of the most astonishing bull markets in history. Propped up by loose monetary policy, stock markets have soared. From the 2009 low to the September 2018 highs, US stocks have gained more than 280%. Yet slowing global growth, a trade war, and hawkish Fed policy are helping usher in what looks to be a new era for stock markets.

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It's all painting a gloomy picture. "Markets still under pressure from last week’s more hawkish Fed update, exacerbating fears about slowing growth and more expensive refinancing following years of stimulus," said Michael van Dulken, the head of research at Accendo Markets, in a note.

The dollar fell 0.4% and gold rose 1% while Brent Crude oil and WTI were both down at least 2.3%.

The US 2-year and 10-year Treasuries yield curve held near 15 basis points, indicating bond market concerns about slowing global growth and highlighting greater recessionary fears in credit markets.

How overseas markets fared

In Asia, China's Shanghai Composite closed up 0.4% while Australian markets closed up 0.5%. MSCI's broadest index of Asia-Pacific shares outside Japan lost 0.5% to its lowest in seven weeks.

In Europe, stocks slipped amid weak trading with a number of exchanges closed on Christmas Eve with most closing early. The FTSE 100 fell 0.6% and the French CAC 40 tumbled 1.5%.