Equity futures rose to stable Wednesday evening after falling earlier, with investors assessing the latest headlines about the Omicron variant and harboring lingering inflation concerns.
Contracts on each of the S&P 500, Dow and Nasdaq closed higher early in the overnight session. The three major indices fell during the regular trading day after the Centers for Disease Control and Protection announced the first confirmed case of the Omicron variant had been identified in the US. More than two dozen countries worldwide have so far found at least one confirmed case of the variant, which was first identified last week.
The latest updates on the virus front come on top of traders’ continued concerns about rising prices. Monetary policymakers have also underlined these ongoing inflation trends, raising concerns that the Federal Reserve could soon diverge from its accommodative policies that had helped support markets during the pandemic. In the Federal Reserve’s December Beige Book, or a collection of anecdotes about economic conditions in the Fed districts, the central bank states that “prices rose at a moderate to robust pace, with price increases being widespread across all sectors of the economy.” economy.”
Federal Reserve chairman Jerome Powell also told lawmakers this week that he thought it would be appropriate for monetary policymakers to consider ending their asset purchase phasing out process earlier than previously telegraphed, or possibly before the middle of the year. next year. That, in turn, has raised the specter that rate hikes could also come faster than previously expected after the Fed’s winding-down process is completed.
According to a number of strategists, inflation – as well as policymakers’ reactions to inflation – will ultimately be one of the drivers of the future of the market.
“In the very short term, the biggest threat is the headlines related to the virus,” Niladri Mukherjee, Merrill and Bank of America Private Bank, head of CIO portfolio strategy, told Yahoo Finance Live on Wednesday. “But going into 2022, inflation is the biggest risk for the markets as a whole. Inflation looks very persistent. Obviously we had 6-7 months of CPI [the Consumer Price Index] printing above 5%, now 6%. I wouldn’t be surprised if there are even higher prints in January, February, especially if the variant actually leads to further closures.”
6:31 PM ET Wednesday: Stock Futures Recover Some Losses
These were the key moves in the 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%), up to 34.087.00
Nasdaq futures (NQ = F): +39.75 points (+0.25%) to 15,909.5
NEW YORK, NEW YORK – NOVEMBER 29: A trader works on the floor of the New York Stock Exchange (NYSE) at the start of trading Monday after the sharp drop in global stocks on Friday over fears of the new ommicron Covid variant discovered in South Africa on November 29, 2021 in New York City. Shares rose in morning trading as investors received more data on the new variant and report that symptoms have so far been mild for those who contracted it. (Photo by Spencer Platt/Getty Images)
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter