Even amongst mixed economic data, markets continued to rally as more information emerges about Omicron. Optimism continues to build that the global economy can power thru further pandemic waves.
Markets moved higher on positive Consumer Confidence data as Omicron fears start to fall. Gains were shared widely across the market with all S&P 500 sectors gaining for the day.
A rebound from the Omicron sell-off was helped along by great earnings reports from Nike and Micron Technology.
After new lockdowns to contain Omicron in Europe and a disruption for the Build Back Better bill, indexes took another day of losses.
Small-caps outperformed the rest of the market today as investors repositioned for the holidays. The reposition and options expiration drove larger than average volume . All S&P 500 sectors declined.
Investors seemed to rethink their positioning after the Fed updated the public on bond tapering and interest rates. Growth stocks and big tech saw the biggest losses, while cyclical sectors benefited. Some new fears of lockdowns around Omicron may also have contributed to the sell-off.
Markets pivoted to the upside after Jerome Powell’s statements confirmed that the Fed changed its stance on inflation . Bond purchase tapering will complete in March, and we can expect three quarter-point interest rate hikes in 2022.
Indexes moved lower for a second day as investors await the result of the Fed meeting on Wednesday. The Producer Price Index recorded its biggest increase since 2010, signaling more inflation on the horizon.
Fears over Omicron renewed caution as investors also anticipate the Fed meeting occurring this week. Defensive sectors gained for the day while all major indexes declined.
Consumer Price Index data was about what analysts expected, avoiding any big surprises in the morning. Now investors await the Fed meeting next week to determine how officials will respond to soaring inflation.