Wall Street in the red with concerns about ‘tapering’, Omicron – archyde

by Devik Jain, Ambar Warrick and Sinéad Carew

(Reuters) – The New York Stock Exchange ended sharply lower on Tuesday after Federal Reserve Chairman Jerome Powell hinted that the US central bank could step up its asset purchases cut in the face of rising inflation, increasing pressure on a market already concerned about the spread of a new variant of the coronavirus.

The Dow Jones index fell 1.86%, or 652.22 points, to 34,483.72 points.

The larger S & P-500 lost 88.27 points, or 1.90%, to 4,567.00 points.

The Nasdaq Composite fell by 245.14 points (1.55%) to 15,537.69 points.

Speaking to the US Senate Banking Committee, Jerome Powell said he thought it appropriate to drop the term “transient” to describe rising inflation, adding that the Fed would look into it at its next meeting, in two weeks, on the schedule of tightening its asset purchase programs.

The comments fueled speculation around a possible acceleration in interest rate hikes, amplifying the selling trend during the session as investors were already concerned about the uncertainty surrounding the impact of the Omicron variant of the coronavirus. .

“The main driver behind the decline in stock prices is Powell’s statement about the next Fed meeting about accelerating the ‘tapering’ of buyout programs, which led to the assumption of the uptick. interest rates occur early next year, “commented Mark Luschini, chief strategist at Janney Montgomery Scott in Philadelphia.

“This somewhat ‘hawkish’ change in tone took the market by surprise,” he added, noting that the market was also faced with uncertainty over the dangerousness of the Omicron variant and the additional restrictions that may affect the economy that this could entail across the world.

All eleven major sectors of the S & P-500 ended lower, with seven of them posting a decline of more than 2%. The communications services sector declined 3%.

Pending further information from the US health authorities on the effectiveness of current vaccines against COVID-19 against the Omicron variant, the laboratories have expressed divergent positions.

The CEO of BioNTech told Reuters that the vaccine developed with the American Pfizer should help prevent severe forms of COVID-19 in the event of contamination with the Omicron variant. The CEO of Moderna told him to fear that the current vaccines are less effective against this new strain.

Moderna saw its stock drop 4.4%, while the Regeneron share also ended in the red (2.7%) after the laboratory estimated that its treatment against COVID-19 could be less effective against to the Omicron variant.

* Reminder of the session in Europe: [.EUFR]

* TO BE CONTINUED ON WEDNESDAY:

(French version Jean Terzian)