Shares fell in another volatile trading session on Tuesday amid new concerns about the new Omicron-Covid variant, with Federal Reserve Chairman Jerome Powell warning it poses a risk to the economic recovery – not to mention the Inflation outlook.
The Dow Jones Industrial Average 1.9%, around 650 points, while the S&P 500 lost 1.9% and the Nasdaq Composite lost 1.6%.
Tuesday’s declines came after stocks rallied on Monday and rebounded from their worst day of the year on Friday when Omicron concerns sparked a sharp sell-off that saw the Dow tumble over 900 points.
Omicron poses “downside risks” to employment and economic activity and also complicates the inflation outlook, Federal Reserve Chairman Jerome Powell said in a comment before his quarterly testimony to the Senate Banking Committee on Tuesday.
In addition, stocks suffered another decline after several vaccine manufacturers, including Moderna and Regeneron, warned that existing vaccines may have decreased effectiveness against the new variant.
Moderna CEO Stephane Bancel said in an interview with the Financial Times on Tuesday that there could be a “material decline” in the effectiveness of existing vaccines in combating omicrons.
Much like last Friday’s sell-off, travel stocks like cruise lines and airlines drove the market down Tuesday, while stay-at-home stocks like Netflix and Zoom rebounded.