Dow Retreats By 600 Points; Equities Fell As Speculations Over Vaccine Woes For ‘Omicron’ Surface

Dow Retreats By 600 Points; Equities Fell As Speculations Over Vaccine Woes For ‘Omicron’ Surface

The U.S. Stock market plunged worse on Tuesday after Jerome Powell, the Federal Reserve Chairman informed lawmakers that next month there needs to be a winding down of the central bank’s monthly asset purchases.

Equities too were dwindling again after Moderna Inc.’s chief executive officer expressed fears over the efficacy of the vaccine for the newly discovered omicron variant, which is a cause of worry.

Powell, who was testifying with Treasury Secretary Janet Yellen, informed the Banking Committee that in light of the present economic situation, they must consider fastening the tapering process, keeping in mind the most updated data on inflation and how the job market is operating, in advance. He wishes for this to take place before the meet-up in mid-December to take a stance on the policies to follow.

“Reading between the lines, it appears that Chairman Powell has grown dramatically more concerned with the risk of sustained inflation, and is therefore looking to end the central bank’s asset purchases sooner than initially outlined,” analyzed Matt Weller, global head of research at FOREX.com and City Index.

Powell also differed from the Fed’s naming of inflationary pressures as “transitory,” or temporary. “It’s probably a good time to retire that word and explain more clearly what we mean,” he said.

When it was revealed by experts that there is no way that the efficacy of the vaccine developed keeping in mind the Delta variant, or until then was made would have the exact same efficacy against the omicron variant. Following such an announcement, a 6% dip in prices was seen in the shares of Moderna.

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“This is once again a COVID-driven market and any negative headlines about vaccine effectiveness or the severity of omicron infections could cause more risk-off money flows as the odds of new lockdowns in parts of the world would rise as a result,” wrote Tom Essaye, founder of Sevens Report Research, in a note.

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