Markets tumbled on reports that a Malaysian passenger airline crashed on the Ukraine-Russian border.
US stocks fell to session lows, while gold prices and US Treasuries soared. The Dow Jones, the S&P 500 and the Nasdaq Composite were all knocked by the news.
The NYSE Arca Airline Index, which tracks the shares of airlines listed on the New York Stock Exchange, had lost over 2%.
There were unconfirmed reports that the plane, Malaysian Airlines MH17 from Amsterdam to Kuala Lumpur, had been shot down by a missile somewhere over the east Ukrainian city of Donetsk. All 295 people on board are thought to have died.
"Clearly there is a lot of speculation, there are even videos surfacing on YouTube and the market is quite sensitive to things it can only verify by Twitter," said Joseph Greco, managing director at Meridian Equity Partners in New York, reported Reuters.
Donetsk, 110km from where the plane crashed, has seen fierce fighting between Ukrainian forces and pro-Russian separatists, who call themselves the Donetsk People's Republic.
Military planes have been shot down over eastern Ukraine amid the fighting in recent months.
The Ukrainian government blamed the separatists, but the DPR said it was Ukrainian forces who had fired the missile that allegedly brought down MH17.