* Banks forecast 75 bps Fed hike on June 15

* Wall St 'fear gauge' surges to one-month high

* Indexes down: Dow 2.10%, S&P 2.99%, Nasdaq 3.78%

* S&P 500 hits lowest level since March 2021

June 13 (Reuters) - Wall Street's main stock indexes fell sharply and the S&P 500 was on track to confirm a bear market on Monday on fears that the Federal Reserve's aggressive interest rate hikes would tip the economy into recession.

The benchmark index is more than 20% below its record closing high on Jan. 3, the second such intraday decline since the pandemic-led rout on Wall Street in 2020.

A close of more than 20% below the all-time high would confirm the index is in a bear market, based on a commonly used definition.

All the major S&P sectors were sharply lower, with energy and consumer discretionary leading the declines, as worries over inflation, rate hikes and the Ukraine war unnerved investors.

Market heavyweights Apple Inc, Alphabet Inc , Microsoft Corp and Amazon.com Inc fell between 2.4% and 5.9%.

"This is the kind of agnostic selling you see when everyone wants out of everything - even the best-performing sector of the S&P 500, energy, is finally for sale," said Art Hogan, chief market strategist at National Securities.

"This is the ongoing pricing of risk that happens when inflation continues to run hotter than expectations and in the wake of that, the Fed will likely have to be more aggressive."

A hotter-than-expected inflation print on Friday prompted traders to price in a total of 175 basis point (bps) in interest rate hikes by September, with many expecting a bigger-than-estimated 75 bps rate increase on June 15.

"There was some speculation the Fed may speed up their rate rise, perhaps even an additional quarter percent at this next meeting, which I would suggest is not enough to be able to really significantly slow down inflation," said Chris Campbell, chief strategist at Kroll in Miami.

The two-year 10-year U.S. Treasury yield curve briefly inverted for the first time since April, which many in the markets see as a reliable signal that a recession could come in the next year or two.

The Fed's interest rate decision is due on June 14-15, with focus on the speed and scale of rate hikes that policymakers believe will be needed to quash red-hot inflation.

The Nasdaq Composite index confirmed it was in bear market territory on March 7 and has declined nearly 28% this year. At 11:47 a.m. ET, the Dow Jones Industrial Average was down 658.82 points, or 2.10%, at 30,733.97, the S&P 500 was down 116.47 points, or 2.99%, at 3,784.39, and the Nasdaq Composite fell 443 points or 3.9% to 10,897.

The CBOE Volatility index, also known as Wall Street's fear gauge, spiked to 33.47 points, its highest level since May 12.

Cryptocurrency- and blockchain-related stocks, including Riot Blockchain, Marathon Digital Holdings and Coinbase Global, fell between 11.6% and 14.2% as bitcoin slumped more than 10%.

Declining issues outnumbered advancers for a 17.07-to-1 ratio on the NYSE and for a 7.49-to-1 ratio on the Nasdaq.

The S&P index recorded one new 52-week highs and 73 new lows, while the Nasdaq recorded 11 new highs and 662 new lows.

(Reporting by Anisha Sircar, Sruthi Shankar and Devik Jain in Bengaluru; Editing by Anil D'Silva and Arun Koyyur)