U.S. stocks fell Wednesday, deepening their losses after concerns over the Ukraine crisis helped push the S&P 500 into correction territory.

The threat of war in Ukraine has added to uncertainty in global markets. The U.S. stock benchmark dropped 79.26 points, or 1.8%, to 4225.50, a day after closing down more than 10% from its Jan. 3 record following Russia's deployment of soldiers in Ukraine's Donbas region. The S&P 500 is now down 12% from its record.

On Wednesday, Ukraine declared a state of emergency and began to mobilize reservists, calling on its citizens to immediately leave Russia.

The $Dow Jones Industrial Average(.DJI.US)$ fell 464.85 points, or 1.4%, to 33131.76, while the technology-heavy $Nasdaq Composite Index(.IXIC.US)$ retreated 344.03 points, or 2.6%, to 13037.49, its lowest closing level since May.

The losses were broad-based with 10 of the S&P 500's 11 sectors declining for the day. The consumer discretionary segment fell 3.4%, while the tech segment dropped 2.6%. Only the energy group defied the trend, rising 1%.

Investors say the effects of the tensions on Eastern Europe on stocks and bonds are hard to predict. The implications depend on rapidly moving diplomatic and military developments as well as the possible spillover of higher energy prices into inflation in Western economies.

Money managers already were grappling with looming interest-rate increases by the Federal Reserve. Investors are closely watching for signs of how quickly the central bank will raise interest rates as it seeks to counter inflation. It is expected to begin raising rates in March.

"Geopolitical events tend to spike volatility," said Michael Antonelli, market strategist at Baird. "They tend to be noisy. Those aren't real signal. The real signal in the stock market is what the Fed is doing and what interest rates are doing."

Traders have been reassessing how much stocks are worth given expectations that interest rates will rise. Higher rates tend to weigh on stock valuations because they lower the value investors place on companies' future cash flows.

Traders have been especially hard on technology and other so-called growth stocks, which often trade at pricey valuations based on expectations of growth far into the future.

The tech selloff has helped pull down the pricetag of the U.S. stock market as a whole. The S&P 500 traded this week at 19 times its projected earnings over the next 12 months, down from the 21.5 multiple at which it ended last year.

"Stocks, especially growth stocks, are priced for a lower interest rate environment than we're likely to have over the next few years," said Stephen Auth, chief investment officer of equities at Federated Hermes. "There's a kind of reset going on in stock market valuations."

On Tuesday, the U.S. laid out an initial round of sanctions against Moscow for what President Biden called the start of an invasion of Ukraine. The European Union, the U.K. Canada, Australia and Japan also imposed or proposed restrictions on Russian companies, individuals and financial markets.

"Until the market sees boots on the ground we may not see the reaction that maybe we would have expected," said Brian O'Reilly, head of market strategy at Mediolanum Asset Management. "We're probably now in a wait-and-see mode to see how this develops."

Mr. O'Reilly added that data pointing to strong economic growth was helping the stock market largely take the crisis in stride. Private data firm IHS Markit said Tuesday its composite Purchasing Managers Index for the U.S. rose to a two-month high in February, suggesting the economy gained momentum.

Among individual stocks, shares of $Overstock.com(OSTK.US)$ jumped $8.32, or 23%, to $44.77 after the company beat earnings expectations. $TJX Companies(TJX.US)$ shares fell $2.75, or 4.2%, to $62.50 after the retailer missed expectations for sales and earnings.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note rose to 1.976% from 1.947% Tuesday. Yields rise as bond prices fall.

Overseas, the pan-continental Stoxx Europe 600 slipped 0.3%. The Shanghai Composite Index rose 0.9%, while Hong Kong's Hang Seng added 0.6%.

Oil prices steadied after rising earlier in the week in response to Russia's troops deployment. Brent crude, the global oil benchmark, was unchanged at $96.84 per barrel.

U.S.-listed stocks of Russian-linked companies declined, with shares of energy company $Gazprom PJSC Sponsored ADR(OGZPY.US)$ falling 91 cents, or 13%, to $6.25 and shares of $Yandex(YNDX.US)$, a search-engine company that provides services in Russia, Ukraine and other countries in the region, dropping $5.38, or 14%, to $34.04.