Wall Street closed sharply lower following political unrest in China against the nation’s COVID-19 related restrictions. Moreover, hawkish statement of an important Fed official also dampened market participants’ sentiment. All the three major stock indexes recorded their biggest daily decline in nearly three weeks.How Did The Benchmarks Perform?The Dow Jones Industrial Average (DJI) tumbled 1.5% or 497.57 points to close at 33,849.46. Notably, 25 components of the 30-stock index ended in negative territory while 5 in positive zone. The tech-heavy Nasdaq Composite finished at 11,049.50, sliding 1.6% or 176.86 due to weak performance of large-cap technology stocks.The S&P 500 tanked 1.5% to end at 3,963.94. All 11 broad sectors of the benchmark index closed in negative territory. The Energy Select Sector SPDR (XLE), the Real Estate Select Sector SPDR (XLRE), the Technology Select Sector SPDR (XLK), the Materials Select Sector SPDR (XLB), the Industrials Select Sector SPDR (XLI) and the Financials Select Sector SPDR (XLF) plummeted 2.7%, 2.8%, 2.1%, 2.2%, 1.8% and 1.7%, respectively. The fear-gauge CBOE Volatility Index (VIX) was up 8.3% to 22.21. A total of 9.3 billion shares were traded on Monday, lower than the last 20-session average of 11.3 billion. The S&P 500 posted 12 new 52-week highs and two new 52-week lows. The Nasdaq Composite registered 93 new 52-week highs and 174 new 52-week lows.Socio-Political Unrest in ChinaProtest has broken out in several major cities in China including Shanghai and capital Beijing against the prolonged zero-Covid policy maintained by the Chinese authority. Earlier this month, Wall Street was rumored with the news that China may reopen soon after a long lockdown to prevent the spread of the COVID-19 restrictions.However, recent surge in COVID-19 related infections and deaths has forced the government to implement restrictions for a loner period. Per a CNBC News, citing a viral; video in social media, over the last three days, students staged protests at many universities, while people took to the streets in parts of Beijing, Shanghai, Wuhan and Lanzhou, among other cities.Ongoing socio-political unrest in China likely to have a major negative impact on global economy, especially, the U.S. economy. China is the source of the global supply-chain system, which as already devastated during the pandemic-era. The destruction of the supply-chain system is the primary reason for the current inflationary pressures across the globe. This has led major central banks to adopt tighter monetary control with higher interest rate regime.In the United States, the inflation is currently at near 40-year high. The Fed has raised the benchmark interest rate by 3.75% so far this year with more rate hike to come. U.S. corporate giants, particularly, the tech behemoths, are very much dependent on Chinese supply of low-cost inputs. Moreover, China is the largest market for U.S. high-end products.Crude-Oil Prices Drop Socio-political unrest in China will have significant negative impact on global economy. This may lead to the reduced demand for crude oil.Fearing that, the price of the U.S. benchmark – the WTI crude futures – for January delivery was settled at $77.24 per share, after declining to $73.60 per barrel, its lowest since December 2021. The price of the global benchmark – the Brent crude futures - was settled at $83.19 per share, after declining to $80.61 per barrel, its lowest since January 2022.Consequently, prices of oil behemoths like Exxon Mobil Corp. XOM and Chevron Corp. CVX tumbled 3% and 2.9%, respectively. Exxon Mobil currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Hawkish Comment by Fed OfficialSt. Louis Fed President James Bullard said that the fed should continue to raise the benchmark interest rate in coming months in order to contain inflation. Per Bullard, the market has been underestimating the probability that the central bank will go more aggressive in near future. Bullard said that the Fed should stay away from interest rate cut next year even if the inflation declines consistently. 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Click to get this free report Chevron Corporation (CVX): Free Stock Analysis Report Exxon Mobil Corporation (XOM): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research