Stock futures tumbled in early Tuesday trading, reversing a Monday rebound on Wall Street as investors reassessed risks associated with the new omicron COVID variant.
Futures for the Dow Jones Industrials stepped back 350 points or 1%, to 34,727.
Futures for the S&P 500 faltered 39.75 points, or 0.9%, to 4,611.25.
Futures for the NASDAQ fell 81 points, or 0.5%, to 16,312.
The reversal came after Moderna CEO Stephane Bancel told the Financial Times that he expects existing vaccines to be less effective against the new variant. The CEO told the paper there could be a “material drop” in the current vaccines’ effectiveness against this variant. Bancel told the media on Monday that it could take months to develop and ship an omicron-specific vaccine.
Separately, Regeneron said its antibody treatment may have reduced effectiveness against omicron. Regeneron shares lost 3% in pre-market trading.
Travel shares, which led Friday’s drop and then gained on Monday, were taking hits once again in premarket trading Tuesday. Expedia Group fell 2.3%, Norwegian Cruise Line Holdings tumbled 3.8% and American Airlines shares were off 3.3%.
Some leading pharma stocks also took a hit, with Moderna getting the worst of it as the stock decreased 4.2%. Pfizer, however, was one of the few companies to post gains on the S&P 500, rising 1.2%. Stay-at-home stock Netflix also rose, up 0.7% and videoconference leader Zoom saw shares climb 2.3%.
Federal Reserve Chairman Jerome Powell will tell the Senate Tuesday as part of his quarterly testimony on the pandemic that he believes that the omicron variant poses “downside risks to employment and economic activity.” It also further complicates the inflation outlook, the Fed chief said in his prepared markets released Monday evening.
Overseas, markets in Japan collapsed 1.6% Tuesday, while the Hang Seng in Hong Kong also gave way 1.6%.
Oil prices gave way $2.94 to $67.01.
Gold prices gained $13.20 to $1,798.40 U.S. an ounce.