The Dow futures are up more than 300 points, indicating that investors are reconsidering the omicron danger
Stock futures surged early Tuesday following a week of ups and downs, as investors were less concerned about the new omicron coronavirus variant's possible impact
The Dow Jones Industrial Average futures increased 345 points. Futures on the S&P 500 were up 1.3 percent, while Nasdaq 100 futures were up 1.8 percent.
Following word that Intel was preparing to take its self-driving car company, Mobileye, public in mid-2022, chipmaker stocks were the early winners, with Intel up 8.4% and NVIDIA up 3.7 percent.
Casino stocks were also hot, with Las Vegas Sands up 3.4 percent, and cruise lines gaining on hopes that omicron would be less of a concern than previously thought. Carnival Cruise Line Holdings and Norwegian Cruise Line Holdings both increased by roughly 3.5 percent.
Following news that the drugmaker’s monoclonal antibodies therapy has showed efficacy in treating omicron, GlaxoSmithKline stock rose approximately 1%.
Elsewhere Despite the fact that three of Tesla’s models had to have their cameras replaced, the stock surged roughly 4%. UBS boosted its price estimate for the electric carmaker, predicting that it will be the dominant force in the sector.
The overnight session came after Wall Street’s recovery, which saw the blue-chip Dow climb roughly 650 points. On Monday, the S&P 500 gained 1.1 percent, with increases in all 11 sectors. The Nasdaq Composite ended the day with a 0.9 percent gain. Travel-related stocks, such as airlines and cruise line operators, led the increase.
“Easing Omicron worries are allowing investors to position themselves for a more hawkish Fed,” Fiona Cincotta, senior financial market analyst at City Index, said. “As early indications imply that the new COVID form is less severe, the markets are scaling back on the potential economic damage that Omicron could wreak.”
Investors are hoping that the new Covid-19 strain would cause less disease than previously thought. The initial evidence on the variant is “encouraging,” according to White House Chief Medical Advisor Dr. Anthony Fauci, though he emphasised that additional research is needed to fully comprehend it.
Meanwhile, the market is debating whether the Federal Reserve will begin to phase off its huge economic easing initiatives and raise interest rates sooner than predicted.
Officials from the Federal Reserve have indicated that at its December meeting next week, the central bank would likely vote to double the speed of its taper to $30 billion per month. Initial conversations about when and by how much to hike interest rates next year could start as early as the December meeting.
“Traders are undoubtedly at a crossroads after last week’s market roller coaster,” said Chris Larkin, managing director of trading at E-Trade Financial. “On the one hand, Omicron may pose less of a concern, but the Fed might conceivably speed tightening, resulting in market swings.”
Later this week, the market’s attention will move to new inflation data. The consumer price index, which is predicted to rise considerably more than in the previous month, could act as a stimulus for the Fed to tighten its policies more quickly.
