Wall Street equities rose on Monday, led higher by travel stocks, as fears that the Omicron coronavirus variant would lead to fresh lockdowns eased.
The broad-based S&P 500 index rose 1.2 per cent on Monday, after closing down 0.8 per cent on Friday. Travel-related stocks rallied strongly, with shares in Norwegian Cruise Line, United Airlines, Royal Caribbean Cruises and Carnival all rising by more than 8 per cent.
“It looks like investors are worried about interest rates but not worried about Omicron,” said Jack Ablin, chief investment officer at Cresset Wealth Advisors. “I think the market has concluded that we’re not going to lock ourselves down for it.”
On Sunday the top US health official Anthony Fauci called early signals about the severity of Omicron “encouraging”, telling the news channel CNN “we feel certain that there will be some degree and maybe a considerable degree of protection” with booster jabs.
Market swings on fresh headlines about Omicron are likely while scientists await conclusive data about the variant.
The technology-focused Nasdaq Composite index closed 0.9 per cent higher on Monday. The narrower gain continued a trend seen over the past fortnight, in which the Nasdaq has trailed the S&P 500.
Investors have retreated from faster-growing tech shares as policymakers at the US central bank have signalled their comfort with more aggressively tightening policy than previously thought. Tech sector shares are particularly sensitive to changes in interest rates, given valuations in the industry are dependent on profits far off in the future.
Tesla shares on Monday briefly fell more than 20 per cent from a record high hit last month, before recouping some of those losses.
In the Treasury securities market, bond yields across maturities rose, with longer-dated maturities rising faster than those at the short end. The rise in shorter-dated yields indicates a growing consensus among investors that the Federal Reserve will raise…