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- Dow Jones gives up a 500-point gain as the Covid-19 threat still poses a danger
- Traders retreat risky bets as the first Omicron case is registered in the US
What’s on Focus in the Markets?
The Dow Jones Industrial Average reversed a 500-point gain in the trading session Wednesday. The 30-stock blue-chip index was dragged down by news that the first Covid-19 case caused by the Omicron variant was confirmed in the US.
As a result, stocks across the board fell after floating in the green earlier in the session. In more detail, leading US indexes kicked off the session on an optimistic note. The Dow Jones, for example, rallied more than 520 points as traders shrugged off inflation concerns and Covid-19 jitters.
In the afternoon hours, however, the rally quickly lost steam as the first US Omicron case was identified in California. The selloff was exacerbated near the final minutes of trading. Ultimately, the Dow Jones lost 461 points, marking a U-turn of more than 960 points.
In addition, the benchmark S&P500 declined 1.2%, while the tech-heavy Nasdaq Composite dropped 1.8%.
The concerning Omicron strain of Covid-19 led to a broad-based selloff that was observed outside of stocks, too.
What’s the Latest News on Bitcoin?
Cryptocurrency markets also retrenched to lower levels on Wednesday. Bitcoin, the world’s biggest coin, slipped about 1% on Wednesday and finished the session near $56,000 per coin. While bitcoin’s fall was relatively contained, ether declined about 2% on the day.
More specifically, the Ethereum token tumbled to near $4,550. It’s important to note that Ether almost broke its all-time record yesterday. The second-largest cryptocurrency rallied to $4,800 per coin, just $60 below the record high.
Still, many crypto analysts point to continued growth momentum in the digital asset market. As the crypto space expands, more institutions are expected to get involved. To this end, investment banks and hedge funds are eager to jump into the market once regulations arrive.
What’s New Around the Markets?
As December trading already kicked off, the wider financial markets are expecting both challenges and trading opportunities. On the one hand, increased inflation fears are threatening to cast a shadow over the consistent upside swing in stocks. In addition, coronavirus pressures are weighing on the market mood.
On the other hand, elevated volatility could present opportunities for traders to enter various asset classes. Moreover, the year is coming to an end. This means stocks, currencies, and crypto are likely to endure elevated swings as traders position for the new year.
What’s Next for Traders and Investors?
On Thursday, market participants will look for the latest jobless claims report. The data will reveal how many people filed for unemployment benefits in the previous week. It is a key indicator of labor-market health.
On Friday, the non-farm payrolls report will highlight the pace of the US economic recovery. In other words, it will show how many people found jobs in November. On that note, expectations are set for 550,000 new hires over the previous month.
Today’s Economic Calendar (EST times)
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