The major domestic equity indexes fell sharply in highly volatile trading on Monday, with both the S&P 500 and Dow Jones Industrial Average falling more than four percent, as the Dow notched its largest intraday decline in history with a nearly 1,600-point drop and Wall Street erased its gains for the year.

The declines for the benchmark S&P 500 and the Dow were the largest single-day percentage drops since August 2011, a period of stock-market volatility marked by the downgrade of the United States’ credit rating and the euro zone debt crisis.

The question now for investors, who have ridden a nearly nine-year bull run, is whether this is the long-awaited pullback that paves the way for stocks to again keep rising after finding some value, or the start of a decline that leads to a bear market.

After regular trading hours on Monday, S&P 500 E-mini stock futures rose 0.73 percent, suggesting some traders expect Wall Street to open with a gain on Tuesday.

Bulls argue that strong corporate earnings, including a boost from the recent tax cuts, will ultimately support market valuations. Bears, including short sellers that bet on the market decline, say that the market is over-stretched in the context of rising bond yields as central banks withdraw their easy money policies of recent years.

The stock market has climbed to record levels on the prospect of tax cuts, corporate deregulation and infrastructure spending. Although Trump has frequently taken credit for the rise of the stock market, the rally and economic recovery was well underway during the Obama administration.

As the stock market fell on Monday, the White House said the fundamentals of the economy are strong. Economic growth was at a 2.6 annualized rate in the fourth quarter last year and the unemployment rate is at a 17-year low of 4.1 percent.

On Monday, the financial, healthcare and industrial sectors fell the most, but declines were spread broadly as all major 11 S&P sectors fell at least 1.7 percent. All 30 of the blue-chip Dow industrial components finished in negative territory.

With Monday’s declines, the S&P 500 erased its gains for 2018 and is now down 0.9 percent in 2018. The Dow is down 1.5 percent for the year.

The market’s pullback comes amid concerns about rising bond yields and higher inflation which were reinforced by Friday’s January U.S. jobs report that prompted worries the Federal Reserve will raise rates at a faster pace than expected this year.

On Monday, the S&P 500 ended 7.8 percent down from its record high on Jan. 26, with the Dow down 8.5 percent over that time. The declines come after the Dow and S&P posted their biggest weekly percentage drops since January 2016 last week, and the Nasdaq posted its biggest weekly drop since February 2016.

At one point, the Dow fell 6.3 percent or 1,597 points, the biggest one-day points loss ever. Even with the sharp declines, stocks finished above their lows touched during the session.

Investors also unloaded riskier corporate bonds during the Wall Street stock market rout. Exchange-traded funds that focus on junk bonds suffered a third day of losses. BlackRock’s iShares iBoxx High Yield Corporate Bond ETF, which has about $16 billion in assets, fell 0.6 percent to its lowest share price since December 2016.

The CBOE Volatility index, the closely followed measure of expected near-term stock market volatility, jumped 20 points to 30.71, its highest level since August 2015.

Approximately 11.5 billion shares changed hands in the major domestic equity exchanges on Monday, a number that was well above the 7.6 billion share daily average for the past 20 sessions.

Service Sector Roars

Service sector activity rose to a near 12-1/2-year high in January, due in part to robust growth in new orders, the latest sign of strong momentum in the economy at the start of the year.

Economic growth was developing ongoing strength even before the stimulus from a $1.5 trillion tax cut package, which came into effect last month, has started to filter through. The result is come concern that the economy could overheat.

The yield on the benchmark 10-year Treasury note is up to a four-year high in anticipation of a faster pace of interest rate increases from the Fed than previously expected.

The Fed has forecast three rate increases this year after raising borrowing costs three times in 2017. The Institute for Supply Management’s (ISM) survey on Monday added to a report on Friday showing a pickup in job gains in January and the strongest annual wage growth in more than 8-1/2 years.

The ISM said its non-manufacturing activity index rose 3.9 points to 59.9, the highest reading since August 2005. A reading above 50 indicates expansion in the sector, which accounts for more than two-thirds of U.S. economic activity.

New orders increased by 8.2 points to 62.7, making it the strongest reading since January 2011. Services industry respondents tied the surge in orders to the tax cuts and the strengthening economy. The survey’s production index rose 2.0 points and a measure of services sector employment soared 5.3 points to a record high.

The bullish ISM survey, however, likely overstates the health of the economy. A separate survey from data firm Markit, showed its services sector PMI fell to a nine-month low in January. But the survey’s new orders gauge rose last month.

The economy grew 2.3 percent in 2017 and is expected to hit the administration’s 3 percent target this year, before slowing in 2018.

Respondents to the ISM survey offered an upbeat assessment of business for the first quarter. Finance and insurance industry executives reported “signs of strong growth (in) financial performance expectations given the recent tax changes.”

Their professional, scientific and technical services counterparts said the “outlook continues to look bright for 2018.” The survey also showed services industries paying more for materials, which fits in with expectations of higher inflation and interest rates this year.

Industries reported receiving more export orders. They also reported an increase in imports, which economists said could weigh on gross domestic product growth in the first quarter. Imports subtracted almost 2 percentage points from GDP growth in the fourth quarter.