The stock market gave up gains from earlier in the day and turned negative after the Centers for Disease Control and Prevention reported the first case of the new Covid omicron variant in the United States.
The blue chip index was up more than 500 points earlier in the day, but ended in the red.
Richard Drew is an Associated Press photographer.
The S&P 500 lost 1.2% and the Nasdaq lost 1.8%, while the Dow Jones Industrial Average fell 1.3%.
The day began with a strong rally, but after Dr. Fauci and the CDC confirmed the first case of the new omicron variant in California, the day turned negative.
The World Health Organization says that the Delta variant still accounts for the majority of global coronaviruses cases.
The bad news spooked investors yet again, with stock market volatility surging since late last week when the WHO first labeled omicron as a variant of concern, and the Dow plunged 900 points in its worst day of the year.
Travel stocks led the declines on Wednesday, with airlines, hotels and cruise companies hit hardest.
The markets are reacting to comments from Federal Reserve chairman Powell who said the central bank could soon tighten its monetary policy.
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The Omicron variant iswreaking havoc on the markets. A week ago the economy was strong and stocks were at all-time highs. While he remains optimistic despite recent volatility, Detrick advises that investors shouldbuckle up their seatbelts, as the end of 2021 could be a bumpy one.
The key background is.
The new variant could threaten the U.S. economic recovery. Powell warned that omicron complicates the inflation outlook in his remarks before the Senate on Tuesday. The use of the word "transitory" was dropped by the Fed chair as he warned that elevated prices will linger "well into next year."
What to watch for.
The S&P 500 is up 25% so far this year, but don't expect it to keep going. The benchmark index is expected to rise slightly next year, but a host of risks remain, including surging inflation, supply chain issues and tighter monetary policy from the Federal Reserve. Wall Street's biggest firms predict that investors will face below-average returns.
The first case of Omicron variant has been found in California.
What Wall Street's Biggest Banks Predict for the Future.
Powell takes a Pessimistic view on inflation.
The Federal Reserve is concerned about the impact of Omicron Impact.
