At the start of the week, U.S. stock indexes ended their sessions sharply lower, with the S&P 500 and the NASDAQ suffering their largest one-day percentage drop since mid-May. The blue-chip Dow had its worst day in nearly nine months.
Risk-off sentiment also sent U.S. 10-year Treasury yields sliding, pulling rate sensitive banks stock prices with them. The S&P 500 Banks index dropped 3.3%.
"Much of it is related to the Delta (variant)," said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago. "There's some concern too that maybe the economy is not going to open up as quickly as everyone thinks, and the big boom that everyone's expecting is going to be more of a pop than a boom."
The highly contagious COVID-19 Delta variant, now the dominant strain across the globe, has caused a surge in new infections and deaths, nearly exclusively among unvaccinated people. For an interactive graphic on worldwide vaccine deployment and availability, click here.
"Global availability of the vaccine has been an issue from day one." Nolte said. "That's been out there for a long time. This is the latest iteration of that. We still have a long way to go."
Travel and leisure stocks plunged, with the S&P 1500 Airline index shedding 3.8% and the S&P 1500 Hotel and Restaurant index off 2.7%. The CBOE Volatility index, a gauge of investor anxiety, gained 4.1 points to 22.50, its highest closing level in two months.
Shares of cryptocurrency and blockchain-related firms fell as Bitcoin dropped 3.3% to $30,727.54. BTC investment products and funds registered outflows for a second consecutive week, according to data from digital asset manager CoinShares.