Peter Nurse

Investing.com — U.S. stocks open sharply lower on Tuesday as investors worry about the inability of vaccines to deal with the Omicron version of the Covid-19 viruses.

At 7:20 AM ET (1200 GMT), it was down 420 point, or 1.2%. The contract traded 50 points lower, or 1%. And dropped 110 points (or 0.7%) at that time.

Wall Street’s major indices ended Monday higher after President Joe Biden assured Wall Street investors that there were no travel restrictions and lockdowns are not on the table.

However, mood abruptly changed to the negative after Tuesday. Moderna (NASDAQ:) chief Stephane Bancel stated, in a Financial Times interview, that existing vaccines would struggle to cope with the omicron variant, predicting a ‘material drop’ in their effectiveness.

He said that drugmakers would need to manufacture enough injections of new variant-specific drugs in large quantities for the product to become effective. 

Regeneron (NASDAQ 🙂 Tuesday added that an analysis of its Covid-19 antibody mix suggested it could have decreased activity against Omicron variant.

Federal Reserve Chair Jerome Powell had stated, in prepared testimony released Monday, that the Omicron variant poses risks to both sides of the central bank’s mandate to achieve stable prices and maximum employment.

Investors will watch to see if Fed Chief Adds to These Comments When he Appears Before the Senate Banking Committee Tuesday. 

Twitter (NYSE:), which is part of the corporate sector will be the focus after Jack Dorsey, founder and CEO, announced that he would be leaving the company. Parag Agrawal, former chief technology officer, will take his place.

Staying with social media, Facebook (NASDAQ:) will also be in the spotlight after Britain’s competition regulator directed Meta Platforms, Facebook’s owner, to sell animated images platform Giphy for competitive reasons.

The Omicron concern returned and crude prices dropped. Traders were worried about the impact of new lockdowns on global demand. 

However, it is expected that the Organization of Petroleum Exporting Countries plus its allies (a group called OPEC+), will stop plans to add 400,000 barrels per hour in January. This meeting takes place later in the week.

Later in the session, The will also release its most recent estimate of U.S. crude inventories. 

Futures were trading 2.6% lower at $68.10 per barrel by 7:01 AM ET. They had risen 2.6% Monday and fell 2.7% on Tuesday. The contract dropped 2.7% to $71.22, having gained 1% the previous session.

The price also rose 0.6% to $1.795.15/oz and traded 0.5% higher at 1.1347.