Markets expected to open sharply lower on Covid fears
U.S. stock futures tied to all three stock indexes dived early morning trading Tuesday, after Moderna (NASDAQ: MRNA) CEO Stephane Bancel warned that the Omicron variant of Covid-19 could result in a “material” drop in vaccine efficacy.
In an interview with the Financial Times, Bancel said that most researchers were not expecting such an evolved variant to emerge for another one to two years.
He also added that researchers could take several months to make a vaccine targeted specifically at Omicron.
“There is no world, I think, where [the effectiveness] is the same level…we had with [the] Delta [variant],” the Financial Times quoted Bancel as saying.
Although researchers are yet to learn more about the severity of Omicron, fear around the variant has already triggered the reimposition of some movement and travel restrictions and halted some economic reopening plans.
At around 5:50 a.m. ET, futures for the Dow Jones Industrial Average sank 463 points, or 1.32% to 34,614. S&P 500 futures gave away 49 points, or 1.05% to 4,602 while the tech-heavy Nasdaq 100 futures shed 91.25 points, or 0.56% to 16,299.5.
All eyes on Jerome Powell testimony for Fed policy signals
Meanwhile, Federal Reserve chairman Jerome Powell is scheduled to appear before Congress today where he will discuss policy and be grilled by members of the Senate Banking Committee.
In testimony prepared for delivery to the committee, and published Monday by the Fed, Powell said he still expects consumer prices to recede over the next year as demand and supply come into better balance.
However, the Fed boss warned that the Omicron variant weighs on outlook, and inflation could continue to climb for longer than previously projected.
In the early days of the pandemic, the central bank lowered interest rates to near-zero and announced a massive bond-buying program, a move that helped to thwart a more damaging economic recession.
Jack Dorsey steps down as Twitter CEO
In other news, Jack Dorsey is leaving his role as Twitter (NYSE: TWTR) CEO, effective immediately. The social media giant made the announcement on Monday, adding that Dorsey will stay on as a board member until at least next year.
Dorsey has been replaced by Parag Agrawal, who joined the company ten years ago and rose through the ranks to become its chief technology officer.
In an email to employees, Dorsey said he decided to step down because of his confidence in the “ambition and potential” of Twitter’s employees, the naming of Salesforce (NYSE: CRM) COO Bret Taylor as the new board chairman, and the strength of Agrawal’s leadership.
Twitter stock rallied about 10% following the announcement and finished the session down 2.7% to $45.78 a share.
