The Dow Jones industrial average closed down 610 points — its eighth-largest point loss ever — with Goldman Sachs contributing the most to declines. On a percentage basis the Dow and S&P had their worst day since August 2015, while the Nasdaq composite's 4.1 percent decline was the index's worst since August 2011.
With Friday's drop, both the Dow and S&P erased their gains for the year so far. The Nasdaq composite was nearly 6 percent lower year-to-date.
Financials dropped 5.4 percent in their worst day since August 2011 to lead nine S&P 500 sectors lower.
Investors took a defensive stance with utilities eking out a gain as the only advancing S&P sector. Trade volume was the highest of the year so far, ahead of the Russell index rebalancing scheduled for after the close.
Global stocks plunged, with the Nikkei 225 falling nearly 8 percent. The German DAX closed down 6.8 percent for its worst day since November 2008.
Asian stocks opened weaker and the British pound fell almost 2 percent in early Asian trade on Monday as markets struggled to shake off deep uncertainty sparked by Britain's decision to leave the European Union.
Global stock markets lost about $2 trillion in value on Friday, with MSCI's broadest gauge of the world's stock markets .MIWD00000PUS falling 4.8 percent, its biggest decline in nearly five years.
Among many questions the British exit, or Brexit, has triggered are just how much UK and European economies will slow, how they will negotiate their new relationship and how European leaders will try to boost the crumbling European Union.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS dropped 0.5 percent, led by 1.2 percent fall in South Korean shares .KS11 and a 1 percent fall in Australia.
Japan's Nikkei .N225, however, rose 1.3 percent, a partial rebound after Friday's 7.9 percent fall.
Reference: CNBC, Reuters
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