Wall Street's main indexes tumbled on Monday, as concerns about the pace of a global recovery hit economy-linked stocks at the start of a week in which the Federal Reserve will decide on potentially tapering its pandemic-era stimulus.

At 9:39 am ET, the Dow Jones Industrial Average was down 463.80 points, or 1.34 percent, at 34,121.08, the S&P 500 was down 60.05 points, or 1.35 percent, at 4,372.94, and the Nasdaq Composite was down 244.94 points, or 1.63 percent, at 14,799.03.

Meanwhile, world shares skidded and the dollar firmed ahead of a week packed with global central bank meetings.

European stocks slumped 2.3 percent, on course for their worst session since December, with energy and mining stocks tumbling as the dollar’s jump to near four-week highs crushed commodity prices.

Holidays in Japan, the Chinese mainland and South Korea meant trading was thin in Asia, while politics added extra uncertainty with elections in Canada and Germany bookending the week.

MSCI's broadest index of Asia-Pacific shares outside Japan slid 1.7 percent to its lowest since Aug 24, with Australia stocks, in their worst session in nearly seven months, slumping 2.1 percent.

The MSCI All Country World Index fell 0.6 percent, close to a one-month low and down further from record highs hit earlier this month.

Surging gas prices, and the potential feed through to inflation, provided another headache for traders.

Higher global wholesale power and gas prices have prompted concerns of high winter energy bills and shortages, having already forced some energy supplies out of business in Britain.

Dow Jones futures were down 1.6 percent and S&P 500 futures declined 1.4 percent, after all three Wall Street indexes marked weekly losses on Friday following days of turbulence. 

The Fed is still expected to lay the groundwork for a tapering at its policy meeting on Tuesday and Wednesday, though the consensus is for an actual announcement to be delayed until the November or December meetings.

Yields on 10-year Treasuries fell 6 bps to 1.31 percent, eyeing their biggest daily drop in five-weeks and the curve flattened ahead of the meeting.

The two-year yield, which rises with traders’ expectations of higher Fed fund rates, touched its highest since Aug 27, before easing back. 

"A flatter yield curve suggests some fears the Fed may overdo the eventual hiking cycle," said Tapas Strickland, a director of economics at NAB.

He noted only 2-3 Federal Open Market Committee members would need to shift their "dot plot" forecasts for a hike in 2022 to make it the median, given seven of 18 had already tipped a move next year.

Germany’s 10-year yield, the benchmark for the euro zone, was down more than 5 bps to -0.33 percent, set for its biggest daily fall since July and retreating from the 10-week high touched on Friday after a report suggested the European Central Bank (ECB) expects to hit its inflation target by 2025.

In comments seen as setting the scene for a further slide in the pace of bond buying, ECB board member Isabel Schnabel said the volume of the ECB’s bond purchases was becoming “less important” as the economic outlook improves.

Investors were also keeping an eye on a dozen other central bank meetings in Japan, Indonesia, the Philippines, the UK, Switzerland, Sweden, Norway, Brazil, South Africa, Turkey and Hungary.

The Norges Bank is expected to become the first G10 central bank to lift rates on Thursday.

Lofty U.S. yields and general risk aversion in the markets sent the dollar to a four-week high against a basket of other currencies. The US dollar index was last at 93.386.

The dollar was range bound versus the yen at 109.52, while the euro was at its lowest since Aug 27 at US$1.1706 due to uncertainty ahead of Germany’s election.

The offshore Chinese yuan skidded to three-week lows, falling to 6.4698 yuan per dollar, its lowest since Aug 31.

Canada goes to the polls on Monday with the race too close to call.

The stronger dollar kept oil under pressure, with crude also taking a hit from energy companies in the US Gulf of Mexico resuming production after back-to-back hurricanes in the region shut output. 

Brent fell 1.7 percent to US$74.06 a barrel, while US crude lost 2 percent to US$70.5.

Gold prices hit a more than five-week low, before recovering to trade up 0.2 percent at US$1,757 an ounce.