Stocks in the U.S. and Europe sank following political turmoil in Italy, which stoked fears of instability in the euro bloc.

Investors dumped Italian government bonds Tuesday, driving borrowing costs sharply higher for that country, and shifted money into U.S. bonds. A steep drop in U.S. bond yields, which drives interest rates lower on loans, weighed heavily on banks. JPMorgan Chase fell 4.3 percent.

Technology companies also fell. Safe-play stocks like utilities rose.

New worries about the euro sent the currency to its lowest level against the dollar in nearly a year. The S&P 500 index fell 31 points, or 1.2 percent, to 2,689. The Dow Jones industrial average lost 391 points, or 1.6 percent, to 24,361. The Nasdaq composite fell 37 points, or 0.5 percent, to 7,396.