US Stock Market Nosedives as First Omicron Case Was Reported in California

Source : coinspeaker.com

While pharmaceutical outfits will be looking at modifying existing COVID-19 vaccine formulas to combat Omicron, the ensuing lockdown is an indication that the world is bound to have a long ride with this new coronavirus variant.

US stock market indices are reeling from the uncertainties surrounding the very first Omicron case that has now been registered in California. The entire market pared off gains earlier on Wednesday’s session to end in the red as investors pulled off gains from investment assets.

The S&P 500 (INDEXSP: .INX) slumped by 1.18% to 4,513.04, trailing far below the record high of 4,704.54 set on November 18. The tech-heavy Nasdaq Composite (INDEXNASDAQ: .IXIC) dropped 1.83% 15,254.05. The tides were not in favor of the Dow Jones Industrial Average (INDEXDJX: .DJI) as the 30-stock index slumped by a mere 1.34% to 34,022.04.

As expected, the stocks that are billed to be affected the most, including airlines, hotels, and travelers took serious hits on Thursday. United Airlines Holdings Inc (NASDAQ: UAL) slumped 7.57% to $39.06 as Delta Air Lines, Inc (NYSE: DAL) is down 7.36% to $33.53 while the shares of Booking Holdings Inc (NASDAQ: BKNG) took a 1.66% slump to $2,067.01.

The United States Centers for Disease Control (CDC) reported Omicron’s first case in California, adding the North American nation to at least 23 countries the World Health Organization (WHO) has marked out as infiltrated by the virus.

“It feels as though the market was wondering when not if there was going to be this new variant on our shores,” said Art Hogan, National Securities chief market strategist. However, he isn’t concerned yet about the market impact of omicron. “I think we’re at a place now where we understand there’s a diminishing impact with new waves and new variants with this virus.”

The U.S. 10-year Treasury shot up by 9 basis points to around 1.5% earlier in the session on Wednesday but later retreated to around 1.41%.

US Stock Market Selloff Is Tax-Loss Related

There is a school of thought from Steve Massocca of Wedbush Securities who pointed out that some of the ongoing selloffs in the stock market have been more related to tax-loss selling, and this forms a trend that is likely to continue.

“I think a lot of it is tax-loss selling. I think a lot of the poor names are doing worse because people are taking tax losses because they have so many gains elsewhere,” he said.

The Federal Reserve Chairman, Jerome Powell has hinted at the possibility of the apex bank discussing asset-buying tapering. While the Omicron concerns are now louder than ever, Powell said he believes the tapering can move faster compared to the $15 billion scheduled monthly as planned earlier.

“I think that the taper need not be a disruptive event in markets. I don’t expect that it will be. It hasn’t been so far. We’ve telegraphed it,” Powell said during Congressional testimony on Wednesday.

While pharmaceutical outfits will be looking at modifying existing COVID-19 vaccine formulas to combat Omicron, the ensuing lockdown is an indication that the world is bound to have a long ride with this new coronavirus variant.

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Benjamin Godfrey

Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.

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