The Cboe Volatility Index and VIX-related exchange traded funds surged Monday as equity markets reeled and investors turned risk off in face of rising Covid-19 Delta variant infections.

On Monday, the iPath Series B S&P 500 VIX Short Term Futures ETN (NYSEArca: VXX) increased 14.3% and the ProShares VIX Short-Term Futures ETF (NYSEArca: VIXY) advanced 14.5%, both breaking above their short-term resistance at the 50-day simple moving average. Meanwhile, the CBOE Volatility Index climbed 22.0% to 22.5, breaking above its long-term resistance at the 200-day simple moving average.

The so-called fear gauge jumped as the S&P 500 retreated by 1.6% on Monday.

“You have two concerns coming together… concerns about market technicals and concerns about growth,” Mohamed El-Erian, chief economic adviser of Allianz and former co-CEO of Pimco, told CNBC. “That’s what all the asset classes are telling you.”

Fueling market fears, Covid cases spiked in the U.S. this month with the more contagious Delta variant adding to higher infection rates. The U.S. is averaging almost 30,000 new cases per day over the last seven days ended Friday, up from a seven-day average of around 11,000 cases per day a month ago, according to CDC data. Cases were also rising around the world due to the Delta variant.

“The market appears ready to take on a more defensive character as we experience a meaningful deceleration in earnings and economic growth,” Morgan Stanley chief U.S. equity strategist Mike Wilson said in a note. “Market breadth has been deteriorating for months and is just another confirmation of the mid-cycle transition, in our view. It usually ends with a material (10-20%) index level correction.”

Despite the pullback on Monday, the equity markets remain near record highs as hopes for a better-than-expected earnings season have helped fuel recent market gains.

“Today’s market drop felt unusually jolting after months of quiet markets,” Lindsey Bell, chief investment strategist at Ally, told CNBC. “But there’s been a steady rotation into stay-at-home stocks over the past few weeks with economic growth worries replacing runaway inflation concerns. The Delta variant could be the straw that breaks the camel’s back.”

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