Global markets opened the new trading with severe declines as concerns mount over the worsening crisis in the Ukraine.
Volatility reared its head once more after Russian troops entered Ukraine on the weekend, provoking a harsh response from western nations including the US.
The escalating crisis fuelled concerns of trade sanctions against Russia, and the geopolitical tensions even overshadowed data revealing stronger-than-expected growth in US personal spending, incomes and manufacturing.
Wall Street managed to erase part of its earlier declines, but the mood was a lot grimmer in Europe, where the French and German markets collapsed into a heap.
The Dow fell 154 points (-0.9%) to 16168, the S&P500 declined 13 points (-0.7%) to 1846 and the Nasdaq shed 31 points (-0.7%) to 4277.
In Europe, the UK FTSE dropped 1.5%, whilst the German DAX plummeted 3.4% and the French CAC tumbled 2.7%.
With markets in risk off mode, gold surged more than 2% to its highest settlement since last October.
Oil was another strong gainer amid speculation Russia will retaliate against any sanctions by choking off its gas exports to Europe.
The yen was another beneficiary of the Ukrainian unrest, rising to a one month high versus the US dollar.
The greenback was stronger against most other currencies, with support coming from the positive US economic data.
In economic news, building approvals and current account data are due for release at 11:30am, AEDT. The RBA is also due to make its interest rate decision at 2:30pm, AEDT.
Economists are widely expecting the central bank to leave the official cash rate unchanged at 2.50%.