The US dollar is surging to kick off the trading week as investors seek refuge amid the meltdown in the broader financial markets. The leading stock indexes are crashing, Treasury yields are falling, and the metal commodities are tanking. What is going on? And can the greenback take full advantage of the selloff?

Global investors are hitting the panic button on Monday, primarily due to concern that the growing number of COVID-19 cases could impact the post-pandemic recovery and slow down economic growth worldwide. Even with vaccines being rolled out in advanced economies, the delta variant has been driving up new infections.

In the US, for example, there were more than 51,000 new cases on Sunday. This is the highest figure since the end of April. But deaths have remained on a downward trend, potentially showing that vaccines are working.

Meanwhile, inflation fears are another contributing factor for the downturn. The US annual inflation rate topped 5% in June, while producer prices have surged beyond 7%. Consumer inflation expectations have also climbed, according to recent surveys.

Although incomes and spending have increased, there is still plenty of uncertainty heading into the fall. Will there be a resurgence of coronavirus cases? If so, will this have a tremendous negative effect on the overall economy? This is what traders want to know, which is why they are on the defense right now.

“The market appears ready to take on a more defensive character as we experience a meaningful deceleration in earnings and economic growth,” wrote Mike Wilson, Morgan Stanley’s chief U.S. equity strategist, in a note Monday. “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.”

The Dow Jones Industrial Average has cratered as much as 500 points, the S&P 500 shed more than 1%, and the Nasdaq Composite Index declined nearly 1%. But everything is down. Energy prices have plummeted, the metals market has slumped, and Treasury yields are in the red.

The benchmark 10-year yield is down 0.077% to 1.222%. The one-year bill shed 0.002% to 0.074%, while the 30-year bond plummeted 0.091% to 1.839%.

The US Dollar Index (DXY), which measures the greenback against a basket of currencies, soared 0.31% to 92.97, from an opening of 92.69. The index is coming off a weekly gain of 0.8%, adding to its year-to-date rally of 3.4%.

The USD/CAD currency pair advanced 1.06% to 1.2750, from an opening of 1.2615, at 12:45 GMT on Monday. The EUR/USD fell 0.25% to 1.1777, from an opening of 1.1805.