The failure of Silicon Valley Bank sparked fears of contagion in financial markets, seeing investors flee equities and flock to safe-haven assets such as U.S. Treasurys and gold. Markets calmed somewhat Tuesday, and Kenny Polcari, chief market strategist at SlateStone Wealth, believes the worst of the equity sell-off is over. "I think today was the worst of it," he said Tuesday. "I think you may just have some churn now." "There's a lot of damage done to some of these stocks and they're going to need to rebalance. I think they will, but I do think that the markets are going to be a little on edge until we get through CPI and PPI and get a better sense of how inflation is doing, to get a better sense of what the Fed is going to do next week," Polcari told CNBC's "Squawk Box Asia." Polcari, who was speaking ahead of the release of consumer price index data on Tuesday, and the release of producer price index data on Wednesday, said investors see inflation as the real problem. "I think also after the weekend, and after today, investors realize that Silicon Valley Bank was also very much a specific problem to that bank , and it's not going to permeate the rest of the banking sector," he added. The collapse of SVB brings next week's Federal Open Market Committee meeting into even sharper focus, with Polcari predicting investors will "start to go shopping" on some of the beaten-up stocks once they get more clarity on the Fed's next course of action. How to play it While investors are mostly shunning the banking sector in the short term, Polcari sees "some very interesting opportunities" within the space, particularly in regional banks. "All this chaos creates opportunities. Not for everything, but there are certainly some very good names that are not going to have a problem, that are getting slammed for no other reason other than they are in the industry," he said. Prior to its collapse, SVB specialized in venture-capital financing and was a major bank for tech and early-stage companies, which came under pressure as the Fed hiked rates eight times over 12 months. This also made SVB particularly vulnerable to a higher interest rate regime. One of Polcari 's picks is New York Community Bancorp , which Polcari said is a "great name" that's being punished simply for being a banking stock. He also likes the stock for its 12% dividend yield. The veteran strategist also sees opportunities elsewhere in the market. "I like health care, because in an environment like this, healthcare is one of those things that falls into the category of stuff that people need. You need health care, you need consumer staples, you need energy. So yes, I think there are opportunities certainly in the health care space that are good dividend payers as well," he said. One of his top picks is Pfizer . While the stock is not a "big sexy tech name," it is a "solid, great drug name," according to Polcari. He pointed to Pfizer's proposed $43 billion deal for cancer drugmaker Seagen as a sign of the sector's good health.