By Caroline Valetkevitch

NEW YORK (Reuters) – U.S. stocks were sharply lower on Wednesday afternoon as Ukraine declared a state of emergency and the West unveiled more sanctions against Russia over its move into eastern Ukraine.

The U.S. State Department said a Russian invasion of Ukraine remains potentially imminent, adding that Washington has not seen any indication of Russians backing away.

In a sign of a possible Russian military onslaught, Moscow began evacuating its Kyiv embassy. A sweeping cyberattack on Ukraine’s state websites added to investor worries.

Nasdaq led the day’s decline and was down about 1.8% in afternoon trading, while the information technology sector was the biggest drag on the S&P 500.

“There’s been geopolitical risks and rhetoric that have given investors that much more to be worried about,” said Liz Young, head of investment strategy at SoFi.

“I don’t want to minimize that, but what it’s done is exacerbate the momentum that was already in place to the downside,” she said. “What we were seeing already coming into this was clearly a compression in multiples across a number of different highly valued areas of the market.”

The worsening geopolitical tensions have hurt investor sentiment already dented by worries about aggressive policy tightening by the Federal Reserve to combat inflation.

The Nasdaq has tumbled more than 15% so far this year, while the S&P 500 confirmed a correction in the previous session as 70% of its components slipped more than 10% from their record highs and over 200 stocks lost more than 20% of their value.

The Dow Jones Industrial Average fell 309.45 points, or 0.92%, to 33,287.16, the S&P 500 lost 53.36 points, or 1.24%, to 4,251.4 and the Nasdaq Composite dropped 234.72 points, or 1.75%, to 13,146.79.

A Reuters poll shows the benchmark index rising about 11.5% by end-2022.

Lowe’s Cos Inc added 1.5% after the home improvement chain raised its full-year sales and profit forecasts.

Declining issues outnumbered advancing ones on the NYSE by a 2.07-to-1 ratio; on Nasdaq, a 2.31-to-1 ratio favored decliners.

The S&P 500 posted 2 new 52-week highs and 33 new lows; the Nasdaq Composite recorded 22 new highs and 444 new lows.

(Reporting by Caroline Valetkevitch in New York; Additional reporting by Susan Mathew and Devik Jain in Bengaluru; Editing by Arun Koyyur and Matthew Lewis)