Markets breathed a tentative sigh of relief Monday after President Joe Biden said the new Omicron coronavirus variant wasn’t “a cause for panic.”
Stocks and oil both rebounded from sharp losses they logged last week as traders reevaluated the risks of the new variant amid discussion that it might not be as bad as the fast-spreading Delta strain.
“Friday was a panic selloff,” Ipek Ozkardeskaya, a senior analyst at Swissquote Bank, told The Wall Street Journal. “Traders have had time to sit back and breathe a bit.”
The Dow Jones Industrial Average rose by more than 310 points by afternoon trading Monday as it became clear that lockdowns or other drastic measures wouldn’t be in the immediate future.
Meanwhile, the tech-heavy Nasdaq led the charge forward after Tesla CEO Elon Musk said factory workers would stop engaging in a last-minute push each quarter to meet sales goals. Tesla rose more than 4 percent on the news of a more steady stream of deliveries to customers.
As traders pushed lockdown worries out of their minds, Brent crude futures, the benchmark in global oil markets, were up by 3 percent to $74.89 per barrel. The benchmark fell by more than 10 percent on Friday — the biggest one-day drop since April 2020.
The travel bans imposed on countries in southern Africa last week after the discovery of the variant sent the Dow plunging more than 900 points on Friday. The S&P 500 fell 2.3 percent while the Nasdaq dropped by 2.2 percent.
Ozkardeskaya, the stock analyst, noted that trading volumes are typically lower over the Thanksgiving holiday weekend — a factor which likely exacerbated Friday’s losses.
President Joe Biden on Monday said that he does not anticipate imposing new lockdown measures, soothing markets on Monday. He called the Omicron variant a cause for concern, “not panic.”
The World Health Organization warned on Monday that the risk posed by the Omicron variant was “very high,” though experts still do not know whether it is more transmissible or if it can cause severe illness in vaccinated individuals.
While the news of the variant was unwelcome, investors could take solace in the fact that vaccine manufacturers have said they could update their shots in a relatively short period of time if the need arises.
While the market tanked on Friday, pharmaceutical stocks soared — a trend that continued into Monday.
Moderna, one of the main vaccine makers, saw its share price rise by 8 percent on Monday. It gained some 20 percent on Friday. The company said it could have an updated mRNA vaccine against Omicron ready by early next year.
Another vaccine manufacturer, BioNTech, saw its share price jump by as much as 7.6 percent. It, too, said it was working on a new Omicron-ready vaccine that could be ready within 100 days, if necessary.