Wall Street sank on Tuesday as risk-off sentiment returned to markets after the one-day-rebounding after the Black Friday rout. The selling-off was initially triggered by Moderna CEO Stephane Bancel's comments on the omicron Covid variant. He expects the existing vaccines to be less effective against the new variant. Moderna shares plunged 6.3% on the news. The Fed Powell steepened the downtrend after the Chairman indicates to speed up tapering on bond-buying. He says " it's probably a good time to retire the word "transitory" to describe inflation, which suggests that rate hikes would be sooner than the projection from its November meeting.
All of the 11 sectors finished in red. The Communication Services sector fell 3% the most, led by Discovery, Dish, and Twitter. Tech stocks were the most resilient sector as Apple gained more than 3%, defying the downside mode. Investors see Apple as a safe haven during an uncertain time.
The 10-year US Treasury yield fell to 1.43% as investors worry about the economic slowing-down ahead due to the new variant and the tightening monetary policy.
Oil futures prices dipped further. The WTI futures were down 4.65%, to $66.7.
Gold futures also fell $11, to $1,774.1 per ounce.
Eurodollar, Swiss Frances, and Japanese yen strengthened as safe-haven currencies
The VIX was up 18.2%, to 27.07.