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Stock Market Today - 3/7: Stocks End Sharply Lower, Oil Surges As Russian Invasion of Ukraine Rages On

Stocks post their worst day of the year Monday as oil hits the highest levels since the global financial crisis and Russia deepens its military offensive into Ukraine.

Updated at 4:20 pm EST

Stocks ended sharply lower Monday, while oil prices surged to the highest levels in more than a decade, as Russian forces continue to pound targets in Ukraine, while world leaders extend discussions on banning crude imports from Moscow.

The Dow Jones Industrial Average finished down 797 points, or 2.37%, to 32,817, while the S&P 500, which is down 10.8% for the year, fell 2.95%.

The tech-focused Nasdaq Composite fell 3.62% as 10-year Treasury note yields rose to 1.787%.

Russia's offensive into its Eastern European neighbor, a move that has drawn nearly unanimous condemnation from world leaders, continued into its second week Monday as Vladimir Putin offered so-called "humanitarian corridors" to transport an estimated 1.5 million refugees from pulverized cities in the eastern region of Ukraine.

The offer was dismissed as "immoral" by Kyiv, however, as officials warned it could be a precursor to an all-out assault on the capital later this week.

Talks aimed at banning the import of Russia's 5 million barrels of daily crude output, alongside concerns over supply disruption and the delay of nuclear talks between the U.S. and Iran, sent oil prices soaring again Monday, adding even further upward pressure on food and commodity prices as inflation rates hold at the highest levels in four decades.

Delays in talks between the U.S. and Iran linked to Tehran's nuclear program also added upward price pressures, with investors now focused on any near-term reaction from Saudi Arabia and other OPEC members, who only last week held their monthly output increase to 400,000 barrels per day following a meeting in Vienna.

WTI futures for April delivery were marked $4.15 higher at $119.80 per barrel while Brent contracts for the same month surged $5.33 to $123.40 per barrel.

Average U.S. gasoline prices, meanwhile, topped $4 a gallon for the first time since 2008 last week, and are now within touching distance of the all-time high of $4.103, according to the consumer website Gasbuddy.com

"Financial conditions in the US have tightened the most since the euro crisis in 2011, but the numbers are not including the last two weeks covering the Russian invasion in Ukraine," said analysts at Saxo Bank. "It is quite likely that financial conditions are now tightening at the fastest pace since the great financial crisis which will continue to put downward pressure on equities."

In Europe, stocks were a sea of red, with Germany's DAX performance index falling 1.5% on the session and taking the benchmark into bear market territory. 

Britain's FTSE 100 nearly flat on the session, with support coming from energy and mining companies, while the region-wide Stoxx 600 fell 0.7% to a near 52-week low of 418.86 points.

In the U.S., the CBOE's VIX volatility gauge surged another 12.35% to 35.93 points, as markets tracked headlines from the Russian invasion and reports of a potential ban on crude imports.

U.S. oil majors were on the move, with Exxon Mobil  (XOM)  rising 3.6% to $87.11 and Chevron  (CVX)  jumping nearly 1.76% to $161.45 each.

Occidental Petroleum  (OXY) , slipped 1.39%  following reports that activist investor Carl Ichan has sold his 10% stake in the group, while billionaire investor Warren Buffett boosted his holdings by 30 million shares, taking his stake to 11.2%.

Bed, Bath & Beyond  (BBBY)  shares soared 34.18% to $21.71 each after an investment group backed by GameStop  (GME)  chairman and Chewy.com founder Ryan Cohen -- RC Ventures -- revealed a 10% stake in the home furnishings retailer. 

Apple  (AAPL)  shares lost 2.37% ahead of the tech giant's first product event of the year this week that is likely to include product updates and a price cut for the iPhone SE.