Stock market news live updates: Wall Street shrugs off second Omicron case, Dow soars over 600 points

Emily McCormick · Reporter
8 min read

In This Article:

Stocks rose on Thursday to reverse course after dropping a day earlier, with investors assessing the latest headlines on the Omicron variant and mulling lingering concerns around inflation.

The S&P 500, Dow and Nasdaq advanced and extended gains into afternoon trading. The S&P 500's 1.4% gain on Thursday was its best since mid-October.

The moves came in contrast to the three major indexes slide on Wednesday, after the Centers for Disease Control and Protection announced that the first confirmed case of the Omicron variant had been identified in the U.S. The discovery of a second case on Thursday did little to knock equities from their upward path.

More than two dozen countries globally have so far found at least one confirmed case of the variant, first identified last week.

The latest updates on the virus front have come on top of traders' ongoing anxiousness over rising prices. Monetary policymakers have also underscored these lingering inflationary trends, stoking concerns that the Federal Reserve may soon pivot away from its accommodative policies that had helped support markets throughout the pandemic. In the Federal Reserve's December Beige Book, or collection of anecdotes about economic conditions throughout the Fed districts, the central bank said it observed that, "Prices rose at a moderate to robust pace, with price hikes widespread across sectors of the economy."

Federal Reserve Chair Jerome Powell also told lawmakers this week that he thought it would be appropriate for monetary policymakers to consider ending their asset-purchase tapering process sooner than previously telegraphed, or potentially before the middle of next year. That has in turn raised the specter that interest rate hikes could also come more quickly than previously anticipated after the conclusion of the Fed's tapering process.

According to a number of strategists, inflation — as well as policymakers' responses to inflation — will ultimately be one of the driving forces for the market going forward.

"In the very near-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 as we go into 2022, inflation is the biggest risk for the markets as a whole. Inflation is looking awfully persistent. Obviously we had 6-7 months of CPI [the Consumer Price Index] printing above 5%, now 6%. I wouldn't be surprised to see even higher prints going into January, February, especially if the variant actually leads to further closures."

Recommended Stories