Devik Jain and Ambar Warsrick

(Reuters) – U.S. stock market futures dropped sharply Tuesday following a warning by a vaccine manufacturer Moderna (NASDAQ:) Chief executive of COVID-19 against Omicron variant. He hammered banking, travel and energy shares.

Global equity markets tumbled after Stéphane Bancel also told the Financial Times that it was likely the current crop of vaccines would need to be modified.

Regeneron Pharmaceuticals Inc. (NASDAQ) added to these fears by stating that previous analyses indicated its COVID-19 antibodies drug may have less activity against Omicron variants.

Occidental Petroleum (NYSE) was the worst performing energy share, losing 3.8% due to oil prices plummeting more than 3% because of concerns about demand. [O/R]

Wall Street’s major lenders fell more than 2 percent, following a drop in Treasury yields. Bond buying was high because of safe haven demand. Bank of America Corp. (NYSE:) suffered the greatest drop in peers with a 2.5% decline. [US/]

American Airlines (NASDAQ:) Group saw the largest drop in airline stock, with a decline of between 1.3% and 3.5%. Carnival Cruise Line (NYSE) Corp and Norwegian Cruise Line dropped 3.8%, respectively.

Wall Street’s principal indexes rebounded Monday following Friday’s severe sell-off. This was because investors believed that Omicron coronavirus would not cause lockdowns, after being assured by Joe Biden.

The uncertainty surrounding the new version has raised alarm in a moment when supply chain problems are hampering economic recovery. Global central banks have begun to consider a return of pre-pandemic monetary policies to combat an increase in inflation.

At 6:11 am. ET fell 458 points or 1.31%. They were also down 49.75 point or 1.07% and were down by 89 point or 0.54%.

Janet Yellen (Treasury Secretary) and Jerome Powell (Federal Reserve Chair), will be testifying before the U.S. Senate Banking Committee at 10:00 EST (1500 GMT), in order to discuss economic recovery after the pandemic.

Powell prepared testimony and stated that he expects inflation to decline over the next 12 months, however, he warned that COVID-19, a new strain, could muddy the outlook. Prices may continue to climb for longer periods than previously thought.

The November readings of Chicago PMI (and consumer confidence) data will be the focus. These are due to arrive later in today.

Stay-at-home stocks were the ones that benefited most from the lockdown. They included Teladoc (NYSE) Health, Peloton Interactive, and Netflix Inc (NASDAQ). Zoom Video Communications (NASDAQ:) The stock rose by 0.5% to 2.2%