The yield on the key 10-year Treasury is tumbling as investors flee to safe haven assets in the face of Omicron worries

• Bond yields sharply dropped Tuesday on worries that Omicron may be a vaccine-resistant strain of coronavirus.
• The 30-year Treasury yield fell to its lowest level in 10 months and the 10-year yield hit a three-week low.

Investors pushed into US government bonds Tuesday, driving down yields as they looked for shelter from warnings about the Omicron variant of coronavirus, including one from the Federal Reserve's chief about the potential pain it may inflict on the world's largest economy.

The US stock market opened Tuesday on track to end the last day of November in the red after Moderna CEO Stéphane Bancel told the Financial Times he doubts existing vaccines will be as effective against the new Omicron coronavirus strain. With inventors backing off from risk assets such as stocks, bond prices rose and put pressure on yields.

Such moves lead the 10-year Treasury yield to drop to its lowest level in three weeks, by 8 basis points to 1.421%. The yield on the 30-year Treasury bond fell by 5 basis points to 1.806%, the lowest since late January. Treasury yields serve as benchmarks to a range of lending programs such as mortgages and auto loans.

Along with Bancel's downbeat vaccine assessment, investors considered a gloomy outlook from Federal Reserve Chairman Jerome Powell before his Tuesday testimony on Capitol Hill.

"The recent rise in COVID-19 cases and the emergence of the Omicron variant pose downside risks to employment and economic activity and increased uncertainty for inflation," Powell said in prepared remarks, released late Monday, for the Senate Banking Committee.

"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."

Treasury yields have been surging in recent weeks as investors price in soaring inflation rates, with consumer price inflation at 6.2% the highest since 1990.

Gold, considered a haven asset and a hedge against inflation, rose by 0.6% to $1,794 an ounce, while US oil prices sank by more than 3%, trading under $68 a barrel on the prospect of lower oil demand in the face of a wider spread of Omicron.