By midafternoon Monday the Dow was on pace for one of the worst days of the year (if not the worst day) so far, down more than 890 points to 33,797 (–2.57%). The S&P 500 was down 86 points to 4,640 (–2.00%), and the Nasdaq was faring a little better, down 190 points to 14,236 (–1.32%). As Fortune’s Bernhard Warner put it, the market has the Delta blues.

On CNBC’s Squawk Box this morning, Mohamed El-Erian, chief economic adviser of Allianz and former co-CEO of Pimco, pointed to two culprits behind the selloff: “You have two concerns coming together…concerns about market technicals and concerns about growth,” he said. “That’s what all the asset classes are telling you.”

News stories highlighting the deadly rise of the Delta variant seemed to be sparking fears of more lockdowns on the horizon. At a press conference Friday CDC director Rochelle Walensky implored Americans to seek out vaccines to protect themselves as well as children under the age of 12 who still cannot get vaccinated. “What’s clear: This is becoming a pandemic of the unvaccinated,” Walensky tweeted. “Our biggest concern is that we are going to continue to see preventable cases, hospitalizations, and, sadly, deaths among the unvaccinated,” Dr. Walensky said. According to the New York Times the country passed 34 million cumulative cases on Friday.

The Delta strain is particularly worrisome. As Fortune’s Erika Fry and Nicolas Rapp reported, according to the CDC, which relies upon genomic surveillance data reported through July 3: “51.7% of new COVID cases are estimated to be caused by the Delta strain of the coronavirus, up from 30.4% for the previous two-week period.”

Some sectors were feeling the pain more than others Monday, with airline stocks, cruise stocks and hotel stocks getting hammered. Boeing, Mastercard, and Carnival were all down more than 5% by early afternoon. Meanwhile Moderna, Novavax, and BioNTech were all surging, and Peloton was up more than 5% recalling the patterns of stock trading earlier in the pandemic.

But most analysts were not predicting a return to those dark days of a year ago. “COVID-19 cases have more than doubled from the July lows as the variant as spread, but vaccinations are helping limit serious illness, reducing the need and appetite for tighter restrictions. So while we’ll have to watch the situation closely, we expect the economic recovery to remain on track,” Jeff Buchbinder, equity strategist at LPL Financial tells Fortune.

Inflation worries

COVID aside, some were pointing to a different culprit behind the market’s woes: inflation. As Peter Schiff, chief economist and global strategist at Euro Pacific Capital tweeted Monday:

“The financial media is blaming this morning’s stock market selloff on rising COVID fears. That’s just a convenient scapegoat. It seems far more likely that the market is selling off because the Fed is threatening to prick the bubble by raising interest rates to fight inflation.”

The fear of rising inflation has been looming in the background for weeks, as Fortune’s Shawn Tully reported recently: “The biggest fear by far haunting the worlds of business and investing is the I-word, short for the curse of looming inflation. Consumer and producer prices are now waxing at their fastest pace in well over a decade,” he wrote. “That sudden surge raises the threat that today’s extra-low interest rates will start escalating much sooner—and spike far higher—than previously believed. That prospect spreads terror because super-slim yields are the main force propelling stocks to record after record, and enabling the U.S. to support our gigantic debt and deficits, as well as what could be trillions in proposed new spending for the likes of roads, bridges, airports, broadband, and childcare and education.”

As prices on everything from dining out to electricity to used cars spike, the Fed may need to taper its bond-buying program and nudge interest rates higher ahead of schedule. According to Tully: “The data showing prices rising far faster than the Fed’s forecasts triggered a major shift in its strategy. On June 16, the central bank announced that the majority of the 18-member Open Market Committee believe that the Fed will raise rates twice by the end of 2023. That view counters the March outlook that called for increases in 2024 at the earliest.”

Stock market outlook for 2021 

That said, even though the market sustained big losses today, most analysts aren’t hitting the panic button—at least not yet. As LPL’s Buchbinder puts it: “With no 5% pullbacks for the S&P 500 since last October we are due for some volatility, especially considering the S&P 500 is up more than 90% from the March 2020 lows.”

David J. Kostin, chief U.S. equity strategist at Goldman Sachs, wrote in a report released Monday that he still foresees the S&P 500 ending the year markedly higher, predicting the index will notch a 14% annual gain to end this year at 4300—and end 2022 at 4600.