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U.S. stock futures tumbled anew on Tuesday after Moderna Inc.’s chief executive officer Stéphane Bancel predicted that current vaccines would be less effective against the new omicron variant of the coronavirus that causes COVID-19.
How are stock-index futures trading?
-
S&P 500 futures
ES00,
-0.76%
fell 40 points, or 0.9%, to 4,611. -
Dow Jones Industrial Average futures
YM00,
-0.89%
dropped 357 points, or 1%, to 34,720. -
Nasdaq-100 futures
NQ00,
-0.46%
dropped 0.5%, or 81 points, to 16,310
On Monday, the Dow industrials
DJIA,
rose nearly 240 points, or 0.7%, while the S&P 500
SPX,
gained 1.3% and the Nasdaq Composite
COMP,
rallied 1.9%. All three major indexes tumbled more than 2% in Friday’s omicron-inspired rout.
What’s driving the markets?
Just as markets appeared to be finding their footing after the worst session in more than a year on Friday, downbeat comments from vaccine maker Moderna’s
MRNA,
CEO about the prospects for vaccines against the new omicron variant put them back on shaky ground.
“There is no world, I think, where [the effectiveness] is the same level…we had with delta,” Bancel told the Financial Times in an interview published early Tuesday. He said the scientists he’s spoken to expect a “material drop” in effectiveness of current vaccines against omicron.
Bancel cited the much higher number of mutations on the spike protein of the omicron variant and the speed at which it’s currently spreading across Africa as reasons. He predicted vaccine manufacturers would need several months to mass produce a vaccine that would be effective against omicron.
“His tone contrasts with the likes of Pfizer
PFE,
and BioNTech
BNTX,
who suggested any new vaccine would be able to modified fairly quickly. His rather candid comments have also seen oil prices slide back sharply, as an increasingly jittery market react with concern to the prospects of further restrictions and lower demand,” said Michael Hewson, chief market analyst at CMC Markets.
Analysts had warned on Monday that a relatively sanguine outlook about the variant among investors could leave markets prone to volatility in reaction to negative headlines.
See: Only 10% of investors see omicron as biggest threat to financial markets by year-end: flash poll
Bancel’s comments come a day after President Joe Biden said omicron was concerning, but no reason to panic, and the fight against it wouldn’t involve “shutdowns or lockdowns.”
Echoing Friday’s selloff, crude prices tumbled
CL00,
CLF22,
2.7% to $68.05 a barrel, as investors sought shelter in gold
GC00,
the Japanese yen
USDJPY,
and government bonds, with the yield on the 10-year Treasury note
TMUBMUSD10Y,
dropping 8 basis points to 1.44%.
“As we look ahead to the rest of the week, this morning’s drop in markets shows that sentiment is set to remain extremely fickle until we get a clearer idea of what comes next when it comes to the new variant,” said Hewson.
Federal Reserve Chairman Jerome Powell addressed economic threats from the omicron variant in remarks prepared for delivery on Tuesday to the Senate Banking Committee that were released early.
“Greater concerns about the virus could reduce people’s willingness to work in person, which would slow progress in the labor market and intensify supply-chain disruptions,” he said.
