It's not just the U.S. in sell-off mode.
European and Asian markets, and the ETFs that mirror those regions, were also in the red to begin the week as the spread of the Covid delta variant raised fears over the pace of the global economic recovery.
The INDA India ETF, EZU eurozone ETF, and MCHI China ETF, for example, were all sharply lower on Monday. Those three have also underperformed the S&P 500 in 2021. Most Asian markets fell again Tuesday, but major European indexes were flat but in positive territory on Tuesday.
The near-term outlook appears bumpy, but there is one region that presents opportunity over the longer term, according to Boris Schlossberg, managing director of FX strategy at BK Asset Management.
"I really like Vietnam as a long-term hold," Schlossberg told CNBC's "Trading Nation" on Monday. "It's a booming economy, great demographics, 70% of the population is 35 or under, the government has really improved business conditions in the country, a huge amount of foreign direct investment is coming into the country as a result of the fact that people want a manufacturer outside of China and diversify their risk."
The VNM Vietnam ETF has pulled back this month as the number of new daily cases of Covid and the seven-day average in the country have surged. That ETF is down nearly 10% in July. That pullback presents an opportunity to Schlossberg.
"Vietnam is an amazing place both as potentially a manufacturing hub, but also a huge tourist destination," he said. "If you have a 12- to 24-month outlook, it's going to be a very, very strong play in Southeast Asia. It's really going to be the star of Southeast Asia."
Ari Wald, head of technical analysis at Oppenheimer, is sticking stateside rather than looking overseas for opportunity.
"We recommended clients tilt further towards the U.S. through this," Wald said during the same interview. "A concentrated position towards the U.S. has done better when breadth has narrowed, and I think that we're at one of those points where equity breadth is under pressure."
The S&P 500 has climbed more than 13% in 2021. By comparison the ACWX All Country World Index excluding the U.S. is up 5%.
"We've got seasonal headwinds here, so on this pullback I'd be looking at U.S. stocks, I'd looking at large caps and high earnings growers," said Wald.