Volatility gripped Wall Street on Tuesday.

The Dow fell 430 points — 1.7% — on fears about a political crisis in Italy and renewed trade tensions between the United States and China. The S&P 500 and the Nasdaq slipped 1.4% and 0.9% apiece.

Italy is headed for new elections, and investors worry the result could throw the European Union into turmoil. In Wall Street’s worst-case scenario, Italy, the third-largest economy in the European bloc, would vote to leave the euro.

The White House also announced Tuesday that it would impose 25% tariffs on $ 50 billion worth of goods from China and place new limits on Chinese investments in the United States. Treasury Secretary Steven Mnuchin said a trade war with China was “on hold” less than 10 days ago.

The VIX, Wall Street’s fear gauge, spiked 15% to its highest level since May 4.

Investors rushed to safety in bonds. The yield on the 10-year US Treasury dropped 1% to 2.81%. Yields move in the opposite direction of price.

Banks slumped on the bond rally. Falling bond yields can make it harder for banks to make money on the interest they charge on loans.

JPMorgan Chase(JPM), American Express (AXP) and Goldman Sachs (GS) dropped 3%.

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