Most Asian stocks are down, while oil is down as a result of the Manchin Shock and Virus: Markets Wrap

U.S. market futures, most Asian stocks, and crude oil tumbled on Monday over fears of new restrictions to combat the omicron virus type, as well as a setback to President Joe Biden’s economic strategy.

Bond rates fell, gold rose, and the dollar maintained its Friday gain despite a cautious atmosphere.

Traders were evaluating the recent remarks from U.S. Senator Joe Manchin, who left Democrats with little choice for reviving Biden’s program after opposing the roughly $2 trillion tax-and-spending bill.

New restrictions in areas of Europe to slow the spread of omicron are also upsetting investors and dragging on risk sentiment.

In China, the central bank cut the one-year loan prime rate for the first time in 20 months while maintaining the five-year rate unchanged. The Chinese stock market fluctuated. Calls for softening have intensified in response to a crackdown on the property sector, which is dragging on economic growth.

Markets are dealing with a number of uncertainty as we approach the holiday season when lower trading volumes can amplify swings. Manchin threw the latest curveball, with Goldman Sachs Group Inc. economists led by Jan Hatzius lowering their U.S. economic growth projections in response to the senator’s decision.

“Omicron is still a problem, and cases are increasing,” said Robert Schein, chief investment officer at Blanke Schein Wealth Management. “Investors should expect Covid to remain a major factor in market performance until 2022.” Investors aren’t accustomed to protracting periods of the volatility after the 21-month bull market.”

Global markets fell last week, owing in part to expectations of lessening central bank support as officials shift their focus to combating inflation. According to Federal Reserve Governor Christopher Waller, a speedier wind-down of the central bank’s bond-buying program puts it in a position to begin raising interest rates as early as March.

Meanwhile, Turkish President Recep Tayyip Erdogan promised to keep cutting interest rates, which have caused the Turkish lira to be the world’s worst-performing currency over the last three months.

Rising instances of the virus prompted the Netherlands to revert to lockdown, while UK Health Secretary Sajid Javid refused to rule out further measures before Christmas. Lockdowns in the United States are unlikely, but hospitals may be overburdened, according to Biden’s top medical adviser, Anthony Fauci.