After the S&P downgrade announced Friday evening, North American markets opened Monday and tumbled.
The Australian stock market, measured by the S&P/ASX 200, finished the day down 2.91%, while the S&P/TSX composite was down 3.4% in morning trading to 11,796, its lowest level since August 2010.
Gold breached $1,710 an ounces before settling back to $1,700/oz.
Oil and gas took some of the heaviest hits with the S&P TSX Capped Energy Index down 4.8%. Some notable losers were Suncor Energy down by 5.69% to $31.09 and Athabasca Oil Sands falling 6.39% to 12.15.
Standard & Poor announced on Friday evening that it was lowering the United States' triple AAA rating. Its confidence was shaken after the debt ceiling negotiations. Markets are also worried about defaults in Europe as Spain, Italy and other countries face difficulties meeting their debt obligations.