US Stocks Rebound as Omicron Concerns Sway Financial Markets

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Key Takeaways

Stocks gain broadly as market participants pile into the main indexes in a volatile session
Dow Jones soars over 1.8% in its best day since early November

What’s on Focus in the Markets?

Stocks rebounded on Thursday, reversing previous session losses over Omicron-fueled concerns. Volatile swings marked the entire regular trading yesterday as market participants were quick to shift their moods. To this end, investors were largely driven by optimism as they piled into stocks across the board.

More precisely, the Dow Jones Industrial Average gained 1.8% to log its best single-day performance since early November. In addition, the S&P500 rose 1.4% with all 11 sectors finishing in the green. And the Nasdaq Composite advanced 0.8%. Big tech names, however, ended mostly flat or in the red.

With this in mind, investors tend to prefer real-economy stocks like banks or travel companies when the outlook for the economy improves. In contrast, the market is swift to rotate to growth stocks, like technology shares, when the projections for economic activity turn gloomy.

What’s New Around the Markets?

Broadly, Wall Street stocks have been trying to assess this week whether the outlook is bad or good. In more detail, the Omicron Covid-19 variant increased uncertainty around the financial markets. Some reports say effects from the new strain are mild on vaccinated people. On the other hand, others say it could take a few months for drugmakers to produce a vaccine.

Meanwhile, traders are also weighing the prospects for persistently high inflation. On this note, the US Federal Reserve said earlier this week it was time to “retire the word transitory” in describing inflation. This became clear when Fed Chair Jerome Powell spoke to Senate lawmakers twice this week.

In his speech, he also said the US central bank is preparing to raise interest rates sooner than planned. In practice, Fed officials were getting ready to hike rates sometime in late 2022. Now, the step could be taken in the first half of next year in order for the economy to cool from rising prices.

What’s Next for Traders and Investors?

While on the economy theme, it’s important to note today is non-farm payrolls Friday. In other words, investors today will be watching the latest US jobs release. It will show the pace of economic recovery in the US. Specifically, the data will reveal how many new jobs were added by US employers for the month of November.

In that context, today’s market moves could see increased volatility due to the significant nature of the event. Elevated swings could be expected in the US dollar, gold, and stocks.

What’s the Latest News on Bitcoin?

Bitcoin and the cryptocurrency markets are floating fairly flat in the early hours of Friday’s trading session. In detail, the original cryptocurrency hovers near $57,000 per coin. Ether, the second-biggest coin, is up about 1% to levels near $4,570. Also, the entire digital asset market today is estimated to be worth slightly above $2.6 trillion. Moreover, projections for cryptocurrency remain positive as adoption is spreading quickly.

Today’s Economic Calendar (EST times)

04:30 am, GBP, Composite PMI (Nov)
04:30 am, GBP, Services PMI (Nov)
08:30 am, USD, Nonfarm Payrolls (Nov)
08:30 am, USD, Unemployment Rate (Nov)
08:30 am, CAD, Employment Change (Nov)

Check our calendar right here.