(New York) The New York Stock Exchange opened lower on Tuesday, reversing the previous day’s rebound, worried about vaccine effectiveness and downside risks associated with the Omicron variant.
At 10 a.m., the Dow Jones lost 0.78%, the NASDAQ, negative at the opening, returned to stability at +0.07% and the S&P 500 was down 0.46%.
On Monday, Wall Street had partially bounced back from its worst session of the year when the Omicron variant was detected in South Africa.
The Dow Jones index had advanced 0.68% to 35,135.94 points. The tech-dominated NASDAQ gained 1.88% to 15,782.83 points and the extended S&P 500 index 1.32% to 4,655.27 points.
On Tuesday, index futures turned severely red before the opening, after the boss of the Moderna laboratory at the Financial Times.
Stéphane Bancel estimated that there would be a “significant drop” in the effectiveness of vaccines, faced with the new variant.
“We are in a whirlwind of uncertainty related to the Omicron variant, and this uncertainty creates increased volatility in the market,” comments Patrick O’Hare of Briefing.com.
“The downward trend has its roots in concerns about the effectiveness of current vaccines and the possibility that the Fed has made a monetary policy error,” added the analyst as the central bank gradually reduces its monetary support .
To this news were added the comments of Jerome Powell, the president of the Fed, who estimated in the intervention he is to make in the Senate on Tuesday, that “the emergence of the Omicron variant poses downside risks for employment and economic activity and increase uncertainty about inflation ”.
“There is no doubt that Jerome Powell will be invited to explain the risks posed by the new variant during his testimony in Congress,” said Art Hogan of National Securities, which added to the nervousness of investors.
Treasury Secretary Janet Yellen was also to testify and “insist on the need to resolve the problem of the debt ceiling” which could rest within two weeks, said the analyst.
Restrictions
Investors were also concerned about the impact of new restrictions on the supply chain, “a valid concern since the variant is already restricting movement,” said Chris Low, economist for FHN Financial.
The bond market was favored by investors, with yields on 10-year Treasuries (which move in the opposite direction to bond prices) falling to their lowest level in three weeks at 1.43% from 1.50% the watch, a movement that reflects risk aversion.
The VIX index, also known as the “fear index” because it forecasts market volatility, started to rise again.
Almost all sectors of the S&P 500 were in the red, starting with financials (-1.17%), but also energy (-1.10%), in the wake of a fall of more than 3% of crude oil prices.
The titles of pharmaceutical companies accused the blow. Moderna lost 7%. Its rival Pfizer, which indicated the day before to have started working on a formulation of its vaccine against the variant Omicron, was doing well, but its partner BioNtech dropped 6.50%.
Equities linked to the travel sector also drank the cup like Expedia (-2.88%), Booking (-1.92%), Marriott International (-2.34%). Airlines and cruise lines were in bad shape like American Airlines (-2.68%), Delta (-1.42%) or Carnival (-3.55%).