By Devik Jain and Bansari Mayur Kamdar

(Reuters) -U.S. stock indexes plunged on Monday, with the S&P 500 on course to confirm a correction as the prospect of a Russian attack on Ukraine posed as a double whammy for investors already worried about aggressive monetary policy tightening by the Federal Reserve.

A correction is confirmed when an index closes 10% or more lower than its record closing level. The S&P 500 index is now down 11.3% from its record closing high on Jan 3.

All the 11 major S&P sectors declined, with seven of them sliding more than 3% each.

The economically sensitive small-cap Russell 2000 index slipped 2.6%. The index dropped as much as 20.9% from its Nov. 8 peak, putting it on course to confirm a bear market.

NATO said on Monday it was putting forces on standby and reinforcing eastern Europe with more ships and fighter jets in response to Russia’s military build-up at Ukraine’s borders.

A widely watched gauge of investor anxiety in U.S. markets – the CBOE Volatility index – was last trading at its highest level since January 2021.

“If it was just Ukraine by itself, people would ignore it but it is kind of icing on the cake today,” said Gary Black, managing partner, the Future Fund Active ETF (FFND).

“It’s happening at the same time that people are worrying that the Fed is going to make a policy mistake and (that’s) just adding to the uncertainty.”

The Fed’s policy meeting concludes on Wednesday and the market will pay close attention to how worried the Fed is over surging inflation and how aggressive the U.S. central bank will be in trying to contain it.

Fed funds futures traders are fully pricing in a 25 basis point hike in March, in addition to three more rate increases by year-end.

Stocks are off to a rough start in 2022, with the Nasdaq index now down 17.5% from its November closing peak as prospects of faster policy tightening steps spurred a rally in Treasury yields that dealt a sharp blow to Wall Street’s growth names.

At 12:18 p.m. ET, the Dow Jones Industrial Average was down 1,078.86 points, or 3.15%, at 33,186.51, the S&P 500 was down 171.14 points, or 3.89%, at 4,226.80, and the Nasdaq Composite was down 661.36 points, or 4.80%, at 13,107.56.

All the major indexes are trading below their 200-day moving average, a key technical level, watched by market participants.

Tesla Inc slid 8.3% to lead declines among the mega-cap technology stocks.

“For many tech companies, multiples and valuations are certainly high in a lot of instances and so if you don’t deliver the earnings to justify the valuation, there’s room for continued and further corrections,” said Darren Schuringa, chief executive officer of ASYMmetric ETFs in New York.

Kohl’s Corp surged 31.6% after Reuters reported that private equity firm Sycamore Partners is preparing to make a bid for the U.S. department store days after a consortium backed by activist investment firm Starboard Value proposed a buyout.

Declining issues outnumbered advancers for a 9.08-to-1 ratio on the NYSE and for a 5.37-to-1 ratio on the Nasdaq.

The S&P index recorded one new 52-week high and 29 new lows, while the Nasdaq recorded three new highs and 1,281 new lows.

(Reporting by Devik Jain and Bansari Mayur Kamdar in Bengaluru; Editing by Maju Samuel)