US futures rise after S&P 500 notches its biggest one-day rally since March as traders reconsider Omicron threat
US futuresrose Wednesday after stocks posted their biggest rise since March as investors reassessed Omicron.
- The early signs out of South Africa suggest Omicron symptoms are mild, although scientists are still racing to find out more.
The rise in futures came after the S&P 500 jumped 2.07% and the
Scientists' discovery of the Omicron coronavirus variant at the end of November has rocked stocks over the last two weeks. It has injected a heavy dose of volatility into what had been a tranquil market that was consistently hitting record highs.
The Federal Reserve's pivot towards a tougher stance on inflation has hit tech stocks – which have soared in an environment of ultra-low interest rates – particularly hard. Star stock-picker Cathie Wood is nursing heavy losses on her tech-heavy Ark ETFs.
Yet traders have become more upbeat as early signs suggested Omicron symptoms were relatively mild, raising hopes that governments will not have to reimpose strict lockdowns.
"Overnight, more data from South Africa suggesting omicron symptoms were mild gave a green light for the fast-money gnomes of Wall Street to pile back into the buy-everything global recovery trade," said Oanda analyst Jeffery Halley.
Researchers in South Africa said early experiments indicated that Pfizer's vaccine is considerably less effective against Omicron although still offered partial protection. They said booster shots should reduce the chance of catching the disease.
It is still early days in the world's understanding of Omicron, however, with scientists racing to find out more.
Overnight, China's CSI 300 rose 1.5%. Stocks have been helped by the Chinese central bank's injection of liquidity into the financial system by reducing banks' reserve requirements, as it attempts to deal with the crisis at indebted property developer Evergrande.
Stocks also rallied in Japan, Korea and Australia, with investors also cheered by strong Chinese trade data.
The Omicron variant has also whipsawed oil prices, which are highly sensitive to changes in expectations of demand.
Brent crude was up 0.1% to $75.53 a barrel Wednesday. It's now well above a low of $66 a barrel touched earlier this month, but remains a way off October's 3-year high of $86. WTI crude was up very slightly to $72.06 a barrel.
"For the markets… every day that passes without a wave of severe cases driven by Omicron is offering more hope that this won't be the curveball to throw the recovery off course," Deutsche Bank's Jim Reid said.
Bond yields, which move inversely to prices, edged slightly lower after rising Tuesday. The yield on the 10-year US Treasury note fell 2.2 basis points to 1.458%. The dollar index slipped 0.17% to 96.21.
Bitcoin fell 1.6% to $50,509 on the Coinbase exchange, having taking a big hit on Friday and Saturday after stock
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