Your car has probably entered backup mode, or commonly known as "Limp Home Mode"; the original performance is lost but the car can be driven enough to get you home, or to the "nearest Volvo dealer".
Sometimes the ECU resets temporarily but the code is still stored in the ECU, and the problem WILL come back. Since your 850 is '94, you can retrieve code by yourself manually. Pull the code(s) and then post it here so we can help you better.
If this seems beyond your capability (which I do not believe), visit an auto parts shop, such as AutoZone that provides free diagnostic service and have them pull codes for you. If you take this route, make sure to tell them that your car is certified for OBD-II and the scanner connection is in front of the shifter, right under the coin holder. The guys at those shops have been educated so that they don't know that some cars made before 1996 do have OBD-II connection. See attached pic; save it in your PC, print it out and take it with you to an auto parts shop. I've circled the OBD-II port.
While the transmission is sluggish, try shifting manually (L-3-D), as this may get you better performance. As long as you don't do anything outrageous, this does not harm the transmission. But have the problem corrected ASAP.
Also, double-check on the fluid level. I once had this problem and the code for "Incorrect Gear Ratio" was found in the ECU. Itseemed to have beentriggered by a low fluid, as little as a half quart. If you don't know how to check for the correct fluid level, let us know. Checking the transmission fluid level is much different from checking the engine oil level so be careful.