Asian shares and US stock futures sank on Tuesday, after Wall Street suffered its biggest decline since 2011 as investors’ faith in factors underpinning a bull run in markets began to crumble.

S&P mini futures fell as much as 2.5 percent to nearly four-month lows in Asia, extending their losses from the record peak hit just over a week ago to almost 12 percent.

MSCI’s broadest index of Asia-Pacific shares outside Japan slid 3.5 percent to a one-month low, which would be its biggest fall in more than a year and a half, a day after it had fallen 1.6 percent.

Japan’s Nikkei tumbled as much as 5.6 percent while Taiwan shares lost 5.3 percent at one point.

Australian shares dropped 3.0 percent to their lowest since October while South Korean shares fell 3.0 percent.

The rout came after US stocks plunged in highly volatile trading on Monday, with the Dow industrials falling nearly 1,600 points during the session, its biggest intraday decline in history, as investors grappled with rising bond yields and potentially higher inflation.

“The amount of the sell-off that we are seeing is normal. The speed at which we are doing it is not normal,” said Michael Purves, chief global strategist at Weeden & Co in New York.

“Where does the market rout end? I think we are pretty close to a selling climax here. I think we are pretty close. The fundamentals are pretty good. The only thing that is really different is that bond yields got up to 2.8 percent.”

The benchmark S&P 500 slumped 4.1 percent and the Dow 4.6 percent, suffering their biggest percentage drops since August 2011 as a long-awaited pullback from record highs deepened.

“Since last autumn, investors had been betting on the goldilocks economy - solid economic expansion, improving corporate earnings and stable inflation. But the tide seems to have changed,” said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities.

The trigger for the sell-off was a sharp rise in US bond yields following Friday’s data that showed US wages increasing at the fastest pace since 2009, raising the alarm about higher inflation and with it potentially higher interest rates.

The 10-year US Treasuries yield rose to as high as 2.885 percent on Monday, its highest in four years and 47 basis points above the 2.411 percent seen at the end of 2017.

But a massive fall in share prices prompted an about-turn, and in Asian trade on Tuesday, it fell back to as low as 2.685 percent.

Fed fund futures are now pricing in only two rate hikes this year.

The CBOE Volatility index, the closely followed “fear-index” measure of expected near-term stock market volatility jumped 20 points to 30.71, its highest since August 2015.

“For the last several months, whether it’s stocks or commodities, risk-takers had been the winners. And that’s what hedge funds, which now manage $3.2 trillion, have been doing,” Mitsubishi UFJ’s Fujito said.

“Their leveraged position is now being unwound. And it seems as though there are still some people who haven’t run away (from the sell-off) yet. I would expect more instability,” he added.

European shares also tumbled on Monday, with Germany’s Dax hitting a 4-month low.

Yoshinori Shigemi, market strategist at JPMorgan Asset Management, said the specter of inflation will gradually undermine the attraction of equities even though the markets could rebound in the short term.

“In the end, the Fed will have to hike rates. And if it doesn‘t, long-dated bonds will be sold off on worries about inflation. Either way, that is going to slow down the economy. Rising wages also mean corporate profit margins will be squeezed gradually down the road,” he said.

Keen to avoid further risk, investors are closing their positions in other assets, including the currency market where a popular strategy has been to sell the dollar against the euro and other currencies seen as benefiting from higher interest rates in the future.

The euro eased to $1.2358, not far from last week’s low of $1.2335, a break of which could usher in a further correction after its rally to a 3-year high of $1.2538 by late last month.

Against the yen, which is often used as a safe-haven currency because of Japan’s solid current account surplus, the dollar slipped 0.3 percent to 108.69 yen, after having lost one percent on Monday.

Bitcoin was not spared from selling, hitting a 12-week low of $6,400. That represented a 67.5 percent fall from its record high of $19,666, touched on Dec. 17.

Investors also dumped junk bonds, with the yield of Merrill Lynch US high yield index rising to 6.017 percent from 5.964 percent at the end of last week.

Still, it was far below its 2016 peak just above 10 percent, when low oil prices hurt energy firms.

Oil prices also dropped, with international benchmark Brent futures hitting a one-month low of $66.90 per barrel on Monday. It last stood at $67.02.

US crude futures traded at $63.56 per barrel, down 0.8 percent in Asia.