The New York Stock Exchange rebounded sharply on Monday and the Dow Jones erased the losses of the previous week, reassured by hopes that the Omicron variant would be less virulent than initially feared.
Bond rates on Treasuries have risen, with US inflation and Fed policy in the crosshairs.
According to final results at the close, the Dow Jones index gained 1.87% to 35.227.03 points. The Nasdaq regained a third of the ground lost the week before, gaining 0.93% to 15,225.15 points. The broader S&P 500 index climbed 1.17% to 4,591.67 points.
“Preliminary data on the new variant suggests that Omicron appears to be causing relatively mild infections,” which has boosted investor morale, said Wells Fargo analysts.
On Sunday, Anthony Fauci, chief medical adviser to US President Joe Biden, himself said: “So far, it does not appear to be very serious.”
In addition, New York Mayor Bill de Blasio went on the offensive against the virus, announcing that all businesses and private companies in the city will require their employees to be vaccinated to come to work from December 27.
Out of a population of 8.5 million, 6.5 million have received at least one dose of vaccine, according to city hall data.
The timing of the indicators was meager at the start of the week but the market was already positioning itself for Friday’s publication of US inflation for November (CPI), a highly anticipated figure.
Analysts believe that the consumer price index will peak at 6.7% over one year against + 6.2% the month before. Over one month, they forecast + 0.7% against + 0.9% in October.
These expectations were added to the fact that the Fed is due to meet next week and that it could “reduce its monetary support more quickly and pave the way for a rate hike sooner”, underlined Joe Manimbo, specialist in the market of changes to Western Union.
As a result, yields on 10-year Treasuries edged up to 1.43% from 1.34% on Friday as the greenback rallied against the euro.
For Peter Cardillo of Spartan Capital Securities, “the market is starting to focus on two factors.”
“On the one hand, activity will survive despite the new variant, on the other hand the Fed is changing its policy” by being more hawkish in the face of inflation, the analyst told AFP.
“This is not necessarily negative for the market, because the Fed is starting to realize that inflation is serious and that it needs to be tackled,” he added.
All sectors of the S&P 500 are anchored in the green, driven by industrial stocks (+ 1.64%) but also those of the energy sector (+ 1.50%) while crude prices ended up sharply.
Stocks in the traditional economy had a strong resurgence, such as airlines (Delta + 6%, American Airlines + 7.88%) and cruise lines (Royal Caribbean + 8.25%, Carnival + 8%).
Moderna, the vaccine maker, dropped 13.49% as one of its officials on Sunday suggested that the effectiveness of vaccines could be reduced against Omicron. Pfizer (-5.14%) and its German partner BioNtech (-18.67%) also released ballast.
The titles of GCP Applied Technologies jumped 17.10% to 31.64 dollars to approach the offer of Saint Gobain to 32 dollars the title. The French group has reached an agreement to buy the American specialist in construction chemicals for $ 2.3 billion (2 billion euros).
The American news site BuzzFeed, known for its viral content but also for its long-term surveys, has made a discreet entry on Wall Street.
Its merger with a Spac on the one hand did not bring all the money hoped for, investors, as they are entitled to, having in fact recovered most of the 288 million dollars that had been raised. The group is expected to recover $ 16 million in new money alone.
BZFD stock, introduced below $ 10, finished down 11% to $ 8.56.