By Yasin Ebrahim

Investing.com – The S&P 500 moved off session lows Monday, but was still under pressure following a slump in financials amid fears that the omicron-fueled surge in Covid-19 cases would prompt further restrictions and derail the global economic recovery.

It fell by 1.5%.

“Omicron news is dominating the headlines in the final trading days ahead of the Christmas holiday,” Stifel said following reports that the new variant had been identified in 43 out of 50 U.S. states.

The US wave of omicron is projected to “be in the steep part of its exponential growth in 2 to 3 weeks, just as we turn the corner into the new year,”Morgan Stanley said.

These stocks that are in sync with the economy, called Cyclicals were most difficult to find. Banking stocks lead financials as low as U.S. Treasury yields.

Synchrony Financial (NYSE :), Lincoln National(NYSE :), Capital One Financial (NYSE: ) was among the worst-performing companies.

Falling Treasury yields hurts the net interest margin of banks – the difference between the interest income generated by banks and the amount of interest paid out to depositors.

In another blow to the outlook on the recovery, Senator Joe Manchin rejected the Biden administration’s $1.75 trillion spending program amid concerns about adding to the national debt.

Manchin later on Monday appeared to extend olive branch, however, hinting that he would be willing to back a less costly version of the ‘Build Back Better Plan.’

Goldman cut its forecast for GDP in the first, second, and third quarters of 2022, and said “the odds [to pass the spending bill] have clearly declined and we will remove the assumption from our forecast.”

While energy was struggling to reduce losses, oil prices continued to be under pressure. However, they rebounded from their session lows.

Stocks were also negatively impacted by Big Tech, including Apple (NASDAQ), Amazon (NASDAQ), Facebook (NASDAQ), Google (NASDAQ), and Microsoft.

Carnival (NYSE;) declined 1% after forecasting that it would make a profit during the second quarter in 2022. The strong advanced bookings of the second half and second year of 2022 drove the increase.