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“Default could trigger a spike in interest rates, a steep drop in stock prices and other financial turmoil,” she added. “Our current economic recovery would reverse into recession, with billions of dollars of growth and millions of jobs lost.”

Even if lawmakers ultimately avoid a technical default, a lengthy last-minute fight over the debt limit could lead to another downgrade of the U.S. debt rating, akin to what happened in 2011. The mere specter of default led Standard & Poor to downgrade U.S. sovereign credit, which in turned whacked demand for Treasurys and pushed yields up.

But investors fears aren’t exclusive to the borrowing limit.

Instead, the added angst over the debt ceiling adds to growing fears about the delta variant of Covid-19, pesky inflation and the end of easy Federal Reserve policies, according to Art Hogan, chief market strategist at National Securities.

Hogan explained that markets are keeping a close eye on the bipartisan effort to pass $1 trillion in infrastructure spending and Democrats’ effort to add on another $3.5 trillion to revolutionize the country’s social safety net.

But, he said, it’s not necessarily surprising to see the $3.5 trillion bill curtailed as it makes its way through Congress.

“It feels like consensus is that we will get some but not all of the spending proposals passed,” Hogan wrote in an email. It’s likely we see some “increased taxes but certainly not in an order of magnitude that is currently being discussed.”

September is often a choppy month for markets, Hogan added, and 2021 is proving no exception.

“When we think about things that are driving markets, it certainly feels like we have turned from complacent to concerned about a plethora of potential headwinds,” he wrote. “None of the concerns that market participants have in the here and now are necessarily new, but are being viewed through the lens of what historically has been a rough month for markets in general, as such they seem to be hitting a crescendo.”

The Dow and S&P 500 have each lost more than 3.5% in September.