Dow plunges over 300 points, erasing its gains for the year by Tom Huddleston, Jr. @FortuneMagazine July 31, 2014, 2:28 PM EDT E-mail Tweet Facebook Google Plus Linkedin Share icons Geopolitical worries weighed on investors Thursday, with the Dow Jones industrial average dropping 317 points and leading a broad market retreat that left the blue-chip index down for the year. By the close of trading, the Dow had chalked up its biggest drop since February. In addition to the Dow’s sharp slide, the S&P 500 index and the Nasdaq both fell 2% in afternoon trading. The Dow is now lower than where it began the year. In July, the index crossed the 17,000-point mark for the first time ever as broader market indexes hit multiple record highs. The Chicago Board Options Exchange Volatility Index (VIX), known as the “fear index,” rose 27%, hitting a multi-month high. Contributing to the market’s retreat: news late Wednesday that Argentina’s credit rating has been downgraded to selective default by Standard & Poor’s. The country’s second default in 13 years sent its Merval stock index plummeting Thursday afternoon. There are also lingering questions over how the latest round of sanctions on Russia issued by the U.S. and Europe will affect the global economy, including the energy markets. Exxon Mobil XOM , which has a multi-billion dollar partnership with Russian company Rosneft, saw its stock drop 4% on Thursday. Some investors attributed the day’s decline to fears that Federal Reserve may raise rates more quickly than expected. The possibility of an upbeat labor market report, due Friday morning, added to those worries.