Stocks tanked on Monday, pushing the S&P 500 to a new low for the year amid growing concerns that the Federal Reserve's plan to raise interest rates could be too much for the economy and stock market to handle.

The fell as much as 2.5 percent to 2,530.54, surpassing its February intraday low of 2,532.69. The broad market index finished the session down 2 percent at 2,545.94, its lowest close for the year. The Dow Jones Industrial Average lost 507.53 points to close at 23,592.98, bringing its two-day losses to more than 1,000 points. Shares of Amazon and Goldman Sachs led the declines.

The Dow and S&P 500, which are both in corrections, are on track for their worst December performance since the Great Depression in 1931, down more than 7 percent so far for the month. The S&P 500 is now in the red for 2018 by 4 percent.

The tech-heavy Nasdaq Composite dropped 2.2 percent to finish the day at 6,753.73 as Microsoft dropped 2.9 percent. The Russell 2000 — which tracks the performance of smaller companies — entered a bear market, down 20 percent from its 52-week high.

DoubleLine Capital CEO Jeffrey Gundlach said Monday that he "absolutely" believes the S&P 500 will go below the lows that the index hit early in 2018.

"I'm pretty sure this is a bear market," Gundlach told Scott Wapner on CNBC's "Halftime Report. The major averages fell to session lows following his comments.

All 30 stocks in the Dow and all 11 sectors in the S&P 500 posted losses on Monday.

The Cboe Volatility Index — one of Wall Street's favorite gauges of market fear — rose above 25 and volume for the stock market was heavier than usual.

The Fed is expected to hike its benchmark overnight lending rate for a fourth and final time of 2018 on Wednesday. While fears of rising interest rates and an ambitious central bank have spooked markets throughout 2018, such concerns have heightened over the past month as inflation and growth expectations recede.

President Trump doubled down on his criticism of the Fed's rate hiking path on Monday, lambasting the central bank for "even considering" another rate hike just days before its final meeting of the year.

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