U.S. stock index futures inched higher during overnight trading on Wednesday, after the CDC confirmed the first known case of the omicron variant in the U.S., sending stocks tumbling.
Futures contracts tied to the Dow Jones Industrial Average gained 72 points. S&P 500 futures advanced 0.2%, while Nasdaq 100 futures added 0.25%.
During regular trading the Dow fell about 460 points, or 1.34%. Earlier in the session the 30-stock benchmark had advanced 521 points, or 1.5%. The S&P dipped 1.18%, giving back an earlier gain of about 1.9%. The Nasdaq Composite slid 1.83%, after earlier trading 1.8% higher.
Stocks drifted from their morning highs after Fed Chairman Jerome Powell said that he expects policymakers to discuss the possibility of a faster taper schedule at the meeting this month.
“At this point, the economy is very strong and inflationary pressures are higher, and it is therefore appropriate in my view to consider wrapping up the taper of our asset purchases, which we actually announced at the November meeting, perhaps a few months sooner,” he said in a Congressional testimony. “I expect that we will discuss that at our upcoming meeting.”
But selling accelerated when the CDC confirmed that the omicron variant has made its way to the U.S., with the first confirmed case in California.
“Investors are increasingly cautious about the Omicron variant as well as the likelihood of faster tapering,” TD Securities said in a note to clients.
Travel-related stocks were especially hard hit as investors feared that the omicron variant could lead to stricter travel requirements. Cruise companies, airlines and hotel stocks all finished the session deeply in the red.
Wednesday’s whipsaw continues a highly volatile streak for stocks as the market digests what the new variant means.
“We’ve seen this movie before and Wall Street will likely remain COVID-variant headline driven until a clear assessment over this wave can be made,” said Ed Moya, senior market analyst at Oanda. “The next couple of weeks will likely see risk appetite take a cue from incremental Omicron updates, supply chain issues, and every inflation reading,” he added.
On the data front, weekly initial jobless claims numbers will be released Thursday at 8:30 a.m. ET. Economists are expecting a print of 240,000, according to estimates from Dow Jones. The prior reading showed 199,000 first-time filers, which was the lowest since November 1969. The November jobs report will be released on Friday.
Thursday’s reading follows a better-than-expected ADP report on Wednesday. Private payrolls increased by 534,000 in November, ahead of the expected 506,000.
While the bulk of the third-quarter earnings season is over, there are still some companies posting quarterly results. Dollar General, Kroger and Signet Jewelers report on Thursday before the opening bell. Ulta Beauty, Marvell Technology and Ollie’s Bargain Outlet are among the names on deck for after the market closes.
This article was originally published on CNBC