Wall Street's main stock indexes fell sharply on Monday, with the S&P 500 on track to confirm a bear market on fears that the Federal Reserve's aggressive rate hikes would tip the economy into recession.

The benchmark index is more than 20% below its record closing high of Jan. 3, as worries over inflation, rate hikes and the Ukraine war push it into bear market territory for the second time since the pandemic-led rout on Wall Street in 2020.

Market heavyweights Apple Inc, Alphabet Inc , Microsoft Corp and Amazon.com Inc fell between 1.5% and 3.3%.

A hotter-than-expected inflation print on Friday prompted traders to price in a total of 175 basis point (bps) in interest rate hikes by September, with many expecting a bigger-than-estimated 75 bps rate increase on June 15.

"Across the board there is blinking yellow and perhaps blinking red lights suggesting that inflation is going to be around for some time," said Chris Campbell, chief strategist at Kroll in Miami.

"There was some speculation the Fed may speed up their rate rise, perhaps even to a quarter percent at this next meeting, which I would suggest is not enough to be able to really significantly slow down inflation, but all that means is that there's troubled times ahead for the economy."

The two-year 10-year U.S. Treasury yield curve briefly inverted for the first time since April, a move viewed by many in the market as a reliable signal that a recession could come in the next year or two.

The Fed's interest rate decision is due on June 14-15, with focus on the speed and scale of rate hikes that policymakers believe will be needed to quash red-hot inflation.

The Nasdaq Composite index confirmed it was in bear market territory on March 7 and has declined nearly 28% this year.

At 09:56 a.m. the Dow Jones Industrial Average fell 611.99 points, or 1.95% , to 30,780.80, the S&P 500 lost 96.57 points, or 2.54%, to 3,801.89 and the Nasdaq Composite lost 342.18 points, or 3.02%, to 10,997.85.

All the major S&P sectors were sharply lower, with energy, consumer discretionary and technology leading the declines.

Financials dropped 2%, while banks slid 1.8%.

The CBOE Volatility index, also known as Wall Street's fear gauge, spiked to 32.54 points, its highest level since May 19.

Cryptocurrency- and blockchain-related stocks, including Riot Blockchain, Marathon Digital Holdings and Coinbase Global, fell between 11.6% and 14.2% as bitcoin slumped over 10% amid a wider market selloff.

Declining issues outnumbered advancers by a 20.4-to-1 ratio on the NYSE and by about a 11.3-to-1 ratio on the Nasdaq.

The S&P 500 posted one new 52-week high and 58 new lows, while the Nasdaq recorded 13 new highs and 690 new lows.

(Reporting by Sruthi Shankar, Anisha Sircar and Devik Jain in Bengaluru; Editing by Anil D'Silva)