Shares traded sharply lower on Monday morning at the start of holiday-abbreviated week trading, with investors expecting renewed virus-related restrictions overseas and significant social policy bill cuts.
Contracts on the S&P 500 and Nasdaq each fell more than 1%. The Dow was 300 points higher or 0.9% lower than the opening bell. Treasury yields fell as investors concentrated on safe asset assets, and 10-year yields were less than 1.4%. CBOE instability code, Or VIX, 25 more than 20% higher.
U.S. crude fell 3% to close at $ 69 a barrel, tightening restrictions in Europe and triggering tremors around energy demand. Countries from From Germany to Ireland Curfews or travel restrictions have been imposed in recent days due to the rapidly spreading new variant. And the Netherlands for the weekend Announced nationwide locks for essential shops, bars and restaurants Until January 14th. This weekend, the Omicron variant Reported in about 89 countries. Cases double every 1.5 to 3 days.
Renewed fears about the economic impact of the Omicron variant, coupled with concerns over the prospects for a tight monetary policy for investors last week, suggest that the Federal Reserve has accelerated its asset-purchase ratio and that three interest rate hikes are likely next year. Last week, each of the three major indices recorded steep weekly losses. The Nasdaq is down 3% and the S&P 500 and Dow are down nearly 2% each week.
However, other updates on the effect of variation on the current COVID-19 vaccine were very encouraging. Moderna (MRNA) Said a booster on Monday, Or a third dose, which increased the level of its shot omigron neutralizing antibody. It echoed the results Pfizer (PFE) and BioNTech (BNTX) since the beginning of this month About the effectiveness of the third dose of their vaccine in neutralizing Omicron. Shares of Moderna rose more than 7% above the opening bell.
Investors also digested the unexpected news that Senator Joe Manson (D., W.W.) will not support President Joe Biden’s $ 1.75 billion built — back social policy bill. Mancin, speaks Fox News Sunday, He said he had discussed with Democratic House and Senate leaders and President Biden, but could not reach an agreement on the bill due to concerns about inflation, national debt and the current epidemic.
White House Press Secretary Jen Zaki Issued a statement Manjin’s comments were «abrupt and indescribable reversal of his position» and he said the administration would work to move the law forward next year.
However, this weekend Goldman Socks Cut its quarterly GDP forecasts for 2022 Sen to this bill. Following the withdrawal of Mansin’s support. Economists, led by John Hutchison, expect the fiscal stimulus to be «slightly more negative» than expected next year, given the lack of spending on social and climate-related policies included in the bill. The company cut its US GDP forecast for the first quarter of 2022 from 3% to 2%, from 3.5% to 3% in the second quarter and from 3% to 2.75% in the third quarter.
7:45 am ET Monday: Stock futures are sharply lower
Here is where the markets traded before Friday morning opening:
S&P 500 Futures (ES = F): -52.25 points (-1.13%), 4,557.75
Dow Futures (YM = F): -366 points (-1.04%), 34,886.00
Nasdaq Futures (NQ = F): -208.5 points (-1.32%) 15,579.50
RawCL = F): — $ 2.20 (-3.10%) to $ 68.66 a barrel
Gold (GC = F):-$ 6.50 (-0.36%) to $ 1,798.40 per ounce
10 year treasury (DNX): -1.7 1.385% to get pps
Emily McCormick is a Yahoo Finance correspondent. Follow her on Twitter