NEW YORK— Stocks are plunging in the U.S. and worldwide Friday after Britain voted to leave the European Union. The result stunned investors, who reacted by rushing to the safety of gold and U.S. government bonds as they wondered what will come next for Britain, Europe and the global economy.
The Dow Jones industrial average dropped 611 points, or 3.4 percent, to 17,399 in heavy trading Friday.
The Standard & Poor’s 500 index fell 75 points, or 3.6 percent, to 2,037. The Nasdaq composite sank 202 points, or 4.1 percent, to 4,707.
It was the biggest drop for the Dow and S&P 500 since August and the worst fall for the Nasdaq since 2011.
Some European markets fell even more. France’s benchmark index lost 8 percent, and Germany’s fell 7 percent. Britain’s fell 3 percent.
Bond prices rose sharply as investors sought safety.
The yield on the 10-year Treasury note dropped to 1.57 percent from 1.75 percent a day earlier, a huge move.
Britons voted to leave the EU over concerns including immigration and regulation. It’s far from clear what that will mean for international trade or for Europe, as the EU, which was formed in the decades following World War II, has never before lost a member state.
READ MORE: Prime Minister to resign after vote
The vote brought a massive dose of uncertainty to financial markets, something investors loathe. Traders responded by dumping riskier assets that appeared to have the most to lose from disruptions in financial flows and trade: banks, technology companies and makers of basic materials.
The vote will start years of negotiations over Britain’s trade, business and political links. Observers wonder if other nations will follow in Britain’s footsteps by leaving the EU.
“This entire process is going to take a long time,” said David Kelly, chief global strategist at JPMorgan Asset Management. “This is a negative in economic terms for the UK. The EU will be very tough negotiators with them.”
The Federal Reserve said it is carefully monitoring financial markets and cooperating with central banks overseas.
Investors had sent stocks higher this week as they gradually grew more confident, based on polls and the changing odds in the betting market, that Britain would stay in the E.U. They sent the pound to its highest price of the year and sold bonds, pushing their yields higher.
Those gains were rapidly undone Friday as the euro tumbled and the pound plunged to a 31-year low, while bond yields hit some of their lowest levels of the year and gold surged to a two-year high.
Britain’s FTSE 100 plunged as much as 8 percent but recovered much of its losses later, falling 1.9 percent. The German index sank 5.6 percent and France’s index tumbled 6.5 percent.
The pound hit its lowest level since 1985 before recovering slightly to trade at $1.3648. That’s still far below the $1.4808 it traded at late Thursday in New York.
Oil prices fell sharply. Benchmark U.S. crude lost $2.14, or 4.2 percent, to $48 a barrel in New York. Brent crude, the international benchmark, fell $2.29, or 4.5 percent, to $48.62 a barrel in London.
“This will be an act of economic self-harm with global ramifications,” said Samuel Tombs, chief U.K. economist at Pantheon Macroeconomics.
It could also threaten London’s position as one of the world’s pre-eminent financial centers as professionals could lose the right to work across the EU. The U.K. hosts more headquarters of non-EU firms than Germany, France, Switzerland and the Netherlands put together.
The Bank of England said it had made contingency plans for a “leave” vote and promised to take action to maintain stability. It noted that it has 250 billion pounds ($342 billion) in liquidity available for banks. “We are well prepared for this,” the bank’s governor, Mark Carney, said in a televised statement.
Japan’s Nikkei 225 finished the wild day down 7.9 percent, its biggest loss since the global financial crisis in 2008. South Korea’s Kospi sank 3.1 percent, its worst day in four years. Hong Kong’s Hang Seng index tumbled 4.4 percent and stocks in Shanghai, Taiwan, Sydney, Mumbai and Southeast Asian countries were sharply lower.
In other currencies, the dollar fell to 102.16 yen from 104.47 yen while the euro weakened to $1.1117 from $1.1351.