Now that Omicron fears seem behind us, investors’ focus turned to inflation and how the Fed might react if Consumer Price Index data is higher than expected. That caused investors to move into defensive positions on Thursday ahead of the CPI report due on Friday.
Major indexes marched higher today as confidence grows among investors that Omicron is not as dangerous as initially thought.
Investors rushed back into risk assets as more assurances came from experts that Omicron might spread faster but have less severe symptoms. The drugmaker GlaxoSmithKline also reported that their antibody-based COVID-19 therapy is effective against the new variant.
Whiplash moves in the market driven by Omicron fears continued today. Optimism gained over the weekend as doctors reported mild symptoms for Omicron cases, and it seems vaccines are still effective against the new variant. The positive outlook helped drive markets higher today.
Omicron fears continued to drive a volatile week while investors tried to understand the impact of mixed employment data on Fed bond purchase tapering.
Markets bounced back from the Omicron fear-driven declines this week. The gains were broad across the market, sending all S&P 500 sectors higher. Yet, there is still progress to be made before investors can feel comfortable.
Fears over omicron continued to put pressure on markets, despite optimism that drove a morning rally. Not only did the US find its first case of the new variant, but the Fed’s Jerome Powell signaled that inflation might not recede next year as previously thought. The two caused markets to give up early gains and decline further.