Stock futures were calm Wednesday evening after falling earlier, with investors digesting the latest stories on the Omicron variant and pondering persistent inflationary concerns.
As the overnight session began, contracts on the S&P 500, Dow, and Nasdaq all traded higher. After the Centers for Disease Control and Prevention revealed that the first verified case of the Omicron strain had been detected in the United States, the three major indices fell during the regular trading day. More than two dozen nations have detected at least one confirmed instance of the mutation, which was discovered last week.
The latest virus updates have added to traders’ continued fears about rising pricing. Monetary authorities have also emphasized these persistent inflationary trends, raising concerns that the Federal Reserve may soon abandon the accommodating policies that have supported markets during the pandemic. According to the Federal Reserve’s December Beige Book, a collection of anecdotes about economic conditions throughout Fed districts, “prices grew at a moderate to vigorous pace, with price hikes widespread across sectors of the economy.”
Fed Chair Jerome Powell also told legislators this week that he thought it would be acceptable for monetary authorities to contemplate terminating their asset-purchase tapering process sooner than previously anticipated, maybe before the middle of next year. This has boosted the prospect of interest rate hikes occurring sooner than previously anticipated following the completion of the Fed’s tapering procedure.
According to a lot of analysts, inflation — as well as policymakers’ responses to inflation — will be one of the market’s driving forces in the future.
“The most immediate concern is the virus-related headlines,” Niladri Mukherjee, Merrill Lynch and Bank of America Private Bank’s head of CIO portfolio planning told Editorials99 Finance Live on Wednesday. “However, as we approach 2022, inflation is the greatest risk to the markets as a whole. Inflation appears to be persistent. Obviously,, we had 6-7 months of CPI [Consumer Price Index] printing above 5%, and it is now at 6%. I wouldn’t be shocked to see substantially higher prints in January and February, especially if the variant leads to additional closures.”
6:31 p.m. ET Wednesday: Stock futures recover some losses
Here were the main moves in markets during the overnight session:
- S&P 500 futures (ES=F): +8.75 points (+0.19%), to 4,517.25
- Dow futures (YM=F): +85 points (+0.25%), to 34,087.00
- Nasdaq futures (NQ=F): +39.75 points (+0.25%) to 15,909.5
Emily McCormick is a reporter for Editorials99 Finance. Follow her on Twitter