NEW YORK, New York - U.S. stocks decelerated sharply on Monday in an ominous start to a new week.

Bond yields rose as investors bet the Federal Reserve will continue hiking interest rates and maintain them at high levels for longer.

"Clearly, equity markets want to move higher, but that's very dependent on inflation getting under control," Peter Essele, head of portfolio management at Commonwealth Financial Network told CNBC Monday. "And so, when you have above expectation prints on any econ number that comes out, that tends to fuel inflationary concerns, which sends rates higher."

The Dow Jones industries slumped 482.78 points, or 1.40 percent, to close Monday at 33,947.10.

The Nasdaq Composite shed 221.56 points or 1.93 percent to 11,239.94.

The Standard and Poor's 500 dropped 72.86 points or 1.79 percent to 3,998.84.

On foreign exchange markets, the U.S. dollar reasserted its authority sending all the major currencies scurrying. The euro slid to 1.0487. The British pound dropped to 1.2178. The Japanese yen weakened to 136.71. The Swiss franc eased to 0.9431.

The Canadian dollar sank to 1.3601. The Australian dollar fell to 0.6691. The New Zealand dollar was sharply weaker at 0.6311.

On overseas equity markets, stocks were mixed. The Dax in Germany gained 0.56 percent. The FTSE 100 in London was off 0.15 percent. The Paris-based CAC 40 fell 0.67 percent.

Across Asia, the big mover was the Hang Seng in Hong Kong, which accelerated 842.94 points or 4.51 percent to 19,518.29.

China's Shanghai Composite advanced 55.67 points or 1.76 percent to 3,211.81.

In Japan, the Nikkei 225 edged up 42.50 points or 0.15 percent to 27,820.40.

The Australian All Ordinaries gained 24.30 points or 0.32 percent to 7,527.80.

New Zealand's S&P/NZX 50 rose 35.90 points or 0.31 percent to 11,677.75.

In Jakarta, the Composite Index went against the trend, losing 32.31 points or 0.46 percent to 6,987.33.

The Kospi Composite in South Korea was also down, dropping 15.01 points or 0.62 percent to 2,419.32.