US futures edge lower after the S&P 500 closes just shy of a record, as investors assess Omicron risks

• US futures slipped slightly Thursday after the S&P 500 closed within touching distance of a record the previous day.
• Investors have reassessed the danger of the Omicron coronavirus variant, although volatility is likely to stick around.

US stock futures slipped slightly Thursday after the benchmark S&P 500 index closed the previous session just shy of a record high, as investors continued to assess risks from the Omicron coronavirus variant.

S&P 500 futures were down 0.22%, Dow Jones futures were 0.23% lower, and Nasdaq 100 futures were off by 0.22% in early European trading Thursday, indicating declines at the market open.

Asian stocks broadly climbed overnight as investors bet the economic damage from the new variant would be less than first feared.

China's CSI 300 was up 1.66%, and Hong Kong's Hang Seng rose 0.98%. The gains came despite worrying signs that highly indebted Chinese property developer Evergrande is teetering on the edge of default. But Tokyo's Nikkei 225 closed 0.47% lower.

In Europe, the pan-continental Stoxx 600 index edged 0.23% higher, while the FTSE 100 in London was roughly flat.

Stock markets sold off sharply when the Omicron variant was first identified in southern Africa at the end of November, and scientists began racing to find out more about the new strain. Concerns have focused on what impact it could have on the global economy, as governments bring in travel bans and restrictions.

Yet investors have been cheered by signs from around the world that have suggested Omicron's symptoms may be milder than with other variants and that booster shots should provide relatively strong protection. Scientists have cautioned that more work needs to be done on understanding the variant, however.

"Volatility is going nowhere over the coming weeks, but investors are clearly enthused by what the early data is telling us," said Craig Erlam, senior market analyst at Oanda.

"The knee-jerk reaction to the new variant was obviously overdone based on the information we now have, but where the markets will end up is anyone's guess. There's still plenty more to learn."

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Monetary policy has long been the key concern of investors, but there are signs that the impact of the Omicron variant could push central banks to reconsider their plans to cut back on stimulus.

However, strong US inflation could force the Federal Reserve's hand. Traders will be glued to their screens for tomorrow's US CPI inflation data, which is expected to come in even hotter than October's 31-year high.

Neil Wilson, chief market analyst at markets.com, said: "Tomorrow's CPI inflation print for the US could upset the recent recovery – looks like 7% for annual inflation would not be far off the mark. This would cement the Fed's hawkish pivot."

Elsewhere in markets, oil prices slipped. Brent crude was down 0.5% at $75.38 a barrel, while WTI crude was 0.3% lower at $72.09 a barrel. Oil was hit by Omicron fears but has since staged a rally.

Bond yields were little changed, with the yield on the 10-year US Treasury note at 1.508%. The dollar index rose 0.22% to 96.10.