The Greek roller coaster is back.

Fears that a pending debt default could push Greece out of the euro zone rippled through the global stock market Monday, sending the Dow Jones Industrial Average down 350 points as investors waited anxiously for the next stage of the now quick-moving crisis.

That the tiny nation, which has a gross domestic product on par with Missouri or Milan, could have such an outsized impact shows just how intertwined markets have become and how investors are acutely aware of that connection since the housing mortgage bubble burst in 2007.

While analysts and economists say the short term will be bumpy, most are optimistic about the strength of the global economy, which is pegged for moderate growth.

But investors didn’t get that memo yet, and were more focused on bad news in the here and now. Blaring headlines about financial turmoil can hurt consumer sentiment and have a chilling effect on expenditures, particularly among affluent shoppers, whose spending is often seen as tied to the strength of their stock portfolios.

In the near term, the greatest concern is that Greece’s financial state crumbles and that the country is forced out of the European Union and that other EU countries might follow suit. That’s why Monday’s stock declines were not only deep but broad – cutting across many sectors, from basic materials and technology to health care and utilities, as well as segments closer to retail and fashion such as consumer goods and services.

WWD Global Stock Tracker, comprised of 100 international industry fashion and retail companies, declined 2.4 percent to 111.91.

In the U.S., the Dow Jones Industrial Average shed about 350 points, or 2 percent, to close at 17,596, while the S&P 500 also dropped 2 percent to 2,057. The S&P Retailing Industry Group index fell 2.3 percent to 1,130.

In Europe, the FTSE MIB in Milan plummeted 5.2 percent to 22,569, while the CAC 40 in Paris fell 3.7 percent to 4,869 and the DAX in Frankfurt dipped 3.6 percent to 11,083. The FTSE 100 in London finished down 2 percent to 6,620.48.

The declines were preceded by drops in the major indices in the Asia-Pacific region of between 2 and 3 percent, which followed steep declines in Chinese equities even as its central bank cut interest rates.

U.S. retailers closed the day with declines of between 1 and 4 percent. Macy’s Inc. lost 4 percent to close at $67.09 while L Brands Inc. declined 3.4 percent to $85.08. Abercrombie & Fitch Inc. fell 6.2 percent to finish at $22.14, while Perry Ellis International Inc. shed 4.6 percent to $23.68. TJX Cos. Inc. fell 2.9 percent to close at $66.08.

In Europe, some of the hardest-hit stocks were Prada, which fell 5 percent to 37.50 euros, or $33.36, and LVMH Moët Hennessy Louis Vuitton, which lost 4.8 percent to close at 162.79 euros, or $144.85. Richemont, Kering, Burberry and Mulberry all slipped between 0.4 and 2 percent.

The declines came after Greece closed its banks for a week, ahead of a referendum set for July 5 to vote on the terms of the latest deal that the country’s European creditors are offering. Several reports noted that Greece was not expected to make the 1.6 billion euro, or $1.8 billion, debt payment to the International Monetary Fund by its Tuesday deadline.

Luca Solca, managing director and sector head of global luxury goods at research firm Exane BNP Paribas, said the selloff could have been worse and described next Monday as a “decisive day” in terms of how the crisis will further impact the stock markets.

Still, he described investors’ reaction so far as “relatively muted.”

“I’d conclude that markets still attach a moderately high probability that a compromise of some sorts materializes, or that the Greeks vote ‘yes’ in the July 5 referendum,” said Solca.

In order for the crisis to end up impacting luxury goods and luxury goods stocks in a “meaningful” way, Solca said he would have to see a number of events occurring first. Among them, he suggested, would be: the Greek electorate voting against the proposed debt deal in the referendum; the European Central Bank producing a “muted” response that leads to equity and bond markets being impacted, in turn leading to downward stock market adjustments in Europe and the U.S., and a reduction in discretionary domestic demand in Europe and the U.S., creating a recessionary climate that in turn damages discretionary spending in China.

In a research note from Barclays in London discussing the implications of the Greek debt crisis for one British electrical retailer, Dixons Carphone, which is the parent company of the Greek firm Kotsovolos, analyst Chris Chaviaras said the firm “will be able to carry on paying its suppliers and creditors normally,” as the controls on the banks do not affect business operations.

However, Chaviaras said in the note that the bank expects demand among Greek consumers to be “unavoidably affected” by the crisis and the capital controls. “We would not expect Greek consumers’ priority to be big-ticket items as long as capital controls are in place,” the note read.

Despite the pressures facing Greece, Ryan Sweet, director of real-time economics at Moody’s Analytics, said there are “ample signs that consumer confidence is improving. Italian consumer confidence rose from 103.4 to 103.9 in June, while the University of Michigan consumer sentiment index rebounded 5.4 points in June to 96.1.” Sweet noted that the rebound now has the index at its highest level since January.

Last week, Sweet said the Greek drama could be rattling sentiment as investor confidence in Germany dropped to a reading of 31.5 in June from 41.9 prior. But he also said the issues in Greece are only part of the problem, since the index has fallen for three consecutive months, “putting the [German] indicator of economic sentiment at its lowest since December.”

Elsewhere in the euro zone, the opposite might be true. Jason Pride, Glenmede’s director of investment strategy, said the markets are reacting as if the Greece issue is only a Greece issue. “That’s a change from the crisis of several years ago, because Greek debt holders are mostly government institutions and not the banking system,” Pride explained. “European banks are better prepared for a Grexit, and the risk of contagion is lower than it was. Simply put: The markets haven’t really moved.”

Given that Greek banks remain closed for the entire week, that essentially ensures that Greece will miss its International Monetary Fund payment due June 30. And while Pride said “banks in other periphery countries are still vulnerable,” euro-zone economies are gaining healthy momentum despite the uncertainty surrounding Greece. Pride noted that purchasing manager surveys in euro-zone economies are hitting a four-year high.

Standard & Poor’s structured finance analysts said a Greek exit from the euro zone would likely have a limited impact on global structured finance ratings. They reasoned that structured finance exposure to Greece is “not large.”

Mark Taylor, dean of Warwick Business School and former senior economist at the Bank of England and the IMF, said an exit by Greece from the euro zone “would lead to a fall of 20 to 30 percent in its GDP as the country’s trade collapsed and access to further international loans were denied.” Greece’s GDP is about $282 billion.

Taylor said the Greek debt crisis could foster some crisis of confidence in the short run. “The Greek economy is only about 2 percent of the whole euro zone — about the size of Milan — but a Grexit would severely hit market confidence in the euro with trading partners Turkey and nearby Easter European countries severely hurt.”

He said the U.K. would not be too badly hit since only about 1 percent of its trade is with Greece, and U.K. lending exposure to Greece has “come down dramatically in the last couple of years,” according to the latest figures from the Bank of England. But he said the effect on the euro zone would hurt the U.K., since 50 percent of U.K.’s exports go to Europe. On a short-term basis, rising European interest rates and a fall in the euro would affect U.K. exports since it would make U.K. exports more expensive to 50 percent of its market.

Taylor said the bigger concern is setting precedent, because once that’s done, it “may lead to other heavily indebted euro-zone countries such as Spain or Portugal to consider leaving the euro, and this would have a much bigger effect because of the size of their economies, particularly Spain.” Even if Spain and Portugal don’t consider leaving, the markets might think they are considering it, and this could cause further euro-zone problems as capital is withdrawn, he noted.

Rice University economist Ted Temzelides said Greece is an “anomaly” within the euro zone because its “economy has never been modernized. Strong unions and widespread mistrust in markets, a large and inefficient public service, tax evasion, a Byzantine legal system and bureaucracy make the economy extremely unfriendly to investment and growth.”

Temzelides said the country needs to modernize, but there’s not enough support for change by either the government or the people, who he said by now are “used to a free lunch from the European Union.” While the Greek people want to stay in the euro zone, he isn’t sure which way a referendum will go, noting that it would depend on “whether they understand that this is a ‘yes’ or ‘no’ on the euro itself,” he said. “There is a lot of misinformation and paranoia, as well as justified fear, so it could go either way.”

Over the weekend, U.S. Treasury Secretary Jacob Lew was in touch with IMF managing director Christine Lagarde, German finance minister Wolfgang Schaeuble and French finance minister Michel Sapin regarding the “situation in Greece.”

A spokesperson said Lew noted that the U.S. “continues to closely monitor the situation and underscored that it is in the best interests of Greece, Europe and the global economy for Greece and its creditors to find a sustainable solution that puts Greece on a path toward reform and recovery within the euro zone.”

The secretary stressed the importance for all parties to “continue to work to reach a solution, including a discussion of potential debt relief for Greece, in the run-up to the July 5 referendum.”