The new Omicron variant will cause more market volatility.
IANS News Agency
US stock futures rallied as global stocks rebounded from the latest Omicron-driven sell-off, as investors weighed Federal Reserve Chair Powell's comments on bond-buying and inflation.
The S&P 500 futures were 1.19% higher, the Dow Jones futures were up 0.89%, and the tech-laden Nasdaq 100 futures were 1.36% higher, suggesting a higher open for markets at the start of a new month.
After months of calm and regular record highs, the stock market has been volatile because of uncertainty about the impact of the Omicron coronaviruses variant.
Jeffrey Halley, senior market analyst at O, said that the only winner in December will be volatility, as the street sells everything on any negative Omicron headline, and then buys everything back on any hint that the new variant isn't as serious as we all thought.
Moderna CEO Stephane Bancel told the Financial Times that vaccines were likely to be less effective against the variant.
The S&P 500 fell as Powell made comments that drove selling. The benchmark US stock index fell below its record closing high of 4,703.50 on November 18.
The Israeli health minister's comments on Omicron appeared to be contributing to a more positive tone. According to CNN, the initial indications are that those who are still valid for the vaccine and have a booster will also be protected from this variant.
Scientists at the University of Oxford said Tuesday that there is no evidence that Omicron is resistant to current vaccines.
European stocks rebounded along with US futures, after falling sharply Tuesday. The Hang Seng in Hong Kong rose 0.78% while the Tokyo's Nikkei 225 gained 0.41%.
Bond yields rose as investors moved away from safe-haven assets in favor of riskier investments.
The yield on the 10-year US Treasury note went up. It remained well below the recent one-month high of 1.666%, in a sign that investors want to own safer assets in the face of rising coronavirus risks.
The yield on the short-term bond jumped Tuesday and Wednesday after Powell told lawmakers that it's probably a good time to retire the word "transitory" to describe inflation.
Markets interpreted Powell's comments as a sign that the Fed is going to be more aggressive in tackling inflation by raising interest rates and cutting back on bond buying.
The yield on the 2-year Treasury note went up from as low as 0.429% the previous day. It is seen as the most sensitive to interest rates.
"Powell's admission that inflation isn't going away as fast as anyone would like adds fuel to the fire," said Ryan Detrick, chief market strategist for LPL Financial.
The markets are worried that the punch bowl is leaving the party because of a faster bond purchases.
The Omicron variant has whipsawed oil prices, as well as the stock market. The price of crude was higher than the price of gasoline.
Business Insider has an original article.
