The delta variant is now the dominant strain worldwide and surging rapidly, even in countries with high vaccination rates. New coronavirus infections in the United States rose nearly 70 percent in a single week, officials reported Friday, and nearly every state has reported an increase in cases. Japan declared a state of emergency in Tokyo during the Summer Games – which kick off later this week – and banned spectators, but there have been several positive coronavirus tests at the Olympic Village and an alternate for the U.S. women’s gymnastics team has tested positive. Many market watchers are fearful the uptick will lead to a resumption in travel and business restrictions.

Asian markets closed in the red across the board, with Hong Kong’s Hang Seng Index leading the losses with a 1.8 percent slide and Japan’s Nikkei falling 1.3 percent. European markets posted even bigger declines, with Germany’s DAX and France’s CAC 40 tumbling more than 2.5 percent and the Pan-European Stoxx 600 sliding 2.3 percent.

The Dow Jones industrial average closed down 725.81 points, or nearly 2.1 percent, to 33,962.04 for its worst day of 2021. The S&P 500 index skidded 68.67 points, nearly 1.6 percent, to settle at 4,258.49. The tech-heavy Nasdaq composite index shed 152.25 points, or nearly 1.1 percent, to close at 14,274.98.

Companies whose fates are tethered to the recovery were hit hard in early trading, with Carnival Cruises and United Airlines sliding 5.7 and 5.5 percent, respectively. Energy stocks were also pummeled, with ExxonMobil losing 3.4 percent and Chevron sliding more than 2.7 percent.

“The big concern for the market is whether we going to see a slowdown in the global economic recovery,” Russ Mould, investment director at AJ Bell, wrote in commentary Monday. “This could be the overriding force which results in a bad period for equities in the weeks ahead.”

The market jitters and growing case counts echo the earlier days of the pandemic when stocks whipsawed with record volatility as investors struggled to get their arms around the breadth of the pandemic’s impact on the global economy.

The pandemic plunged the U.S. economy into a two-month contraction, according to a new finding by the National Bureau of Economic Research, marking the shortest recession on record. But the public health crisis has continued to grip the economy.

On Monday, investors flocked to safe havens, pushing the yield on the 10-year U.S. Treasury note down just shy of 1.20 percent, its lowest level since February. Bond yields fall as prices rise.

Oil prices also tanked. Over the weekend, OPEC and its allies agreed to ramp up production despite the uncertainty with the delta variant, saying that oil demand is showing “clear signs of improvement” in a statement Sunday. Brent crude, the international oil benchmark, shed 6.9 percent to trade at $68.50 per barrel. West Texas intermediate crude, the U.S. oil benchmark, declined more than 7.6 percent to $66.94.

“While some may be focused on the potential of repeating the dramatic volatility that we saw in early 2020, it is important to keep in mind that we are in the middle of summer when trading volumes can be lighter,” Wayne Wicker, chief investment officer at Vantagepoint Funds, told The Washington Post in an email. “Additionally, the Delta variant that is driving the current concerns by investors today should not prove to be devastating to the economy since vaccination rates continue to rise and health outcomes will be much better than last year.”

Even with the delta variant’s rise, signs of a strong recovery have been abundant. U.S. air travel hit a post-pandemic high on Sunday, with the Transportation Security Administration reporting more than 2.2 million travelers passing through its checkpoints. Consumer spending, which powers the bulk of the economy, has been steady, with June retail sales beating expectations, the Commerce Department reported last week.

“While goods have seen an increase in price due to supply shortages and increased demand, consumers have not let it [faze] them and instead are maintaining a post-quarantine spending spree,” Marwan Forzley, chief executive of Veem, a payments platform that works with thousands of retailers, said in commentary Friday. “Factors for this include businesses opening up with little to no restrictions, borders for travel reopened, and simply the desire to get out and engage in normal life activities again. ”

Markets had been on a record-breaking run after cratering in the early days of the pandemic. Even after allowing for Monday’s declines, the Dow is up nearly 27 percent compared to the same time last year.

“Our streak of winning weeks in the market has come to an end,” Chris Larkin, managing director of trading at eTrade, said in commentary Monday. “While pullbacks like we’re seeing today can rattle the nerves, it’s important to remember that the market is near all-time highs, and corrections are a natural part of a healthy market.”

The market turbulence comes as the trading platform Robinhood – which has capitalized on the surge in retail investing and excitement around stock trading – prepares its initial public offering with an expected valuation as high as $35 billion. Robinhood’s IPO is one of the most anticipated in a year that has already seen a slew of high-profile market debuts, including the cryptocurrency exchange Blockchain, the online gaming platform Roblox, and the dating app Bumble.

In a regulatory filing Monday with the Securities and Exchange Commission, Robinhood said it plans to sell more than 52 million shares in the $38 to $42 range. That would raise about $2 billion if they sell in the mid-offering price.

The online brokerage was at the center of the trading frenzy earlier this year, when hordes of ordinary investors, egged on by trading forums and social media posts, flocked to so-called meme stocks like GameStop and AMC, sending their prices soaring. The volatile trading activity also attracted the attention of lawmakers concerned about potential market manipulation and the naivete of first-time investors. As of March, the company said it has 17.7 million monthly active users, with more than half of their customers claiming that Robinhood was their first brokerage account.