Stock futures were muted early Wednesday morning after the major averages rebounded from a three-day losing streak spurred by fears about the omicron Covid variant.
Dow Jones Industrial Average futures hovered 0.02% higher. S&P 500 futures inched 0.1% lower and Nasdaq 100 futures slipped 0.23%.
All three of the major averages rallied in regular trading, pushing their weekly gains into the green. The Dow added 560 points, or 1.6%. The S&P 500 rose 1.8% and the Nasdaq Composite gained 2.4%.
Travel-related stocks were in relief rally mode as investors put Covid-related fears aside and bought the dip. Delta Air Lines rose 5.9%, United Airlines gained 6.9% and Carnival added 8.7%.
“Some of the best performing stocks are ‘re-opening’ stocks, also indicating that investors are still willing to look through the headwinds from the rise in virus cases,” Goldman Sachs’ Jeff Currie said in a note Tuesday. “The reaction to the virus perhaps signifies an acceptance (at least for now) of the ‘new normal’ … in which investors may be determining that Covid waves are becoming a regular thing – seasonal like the flu perhaps.”
President Joe Biden in a press conference Tuesday urged Americans to get their booster shots, saying those who have are “highly protected.” He also reiterated that the U.S. will not bring back the strict lockdowns that were imposed at the start of the pandemic. Earlier Tuesday, Biden said his administration will deploy 1,000 medical personnel from the military to back up hospitals facing a surge of Covid patients and that it will purchase 500 million at-home Covid tests that will be free to Americans through a website starting next year.
With the delta variant, “the economy was able to sustain better than most expected,” said Keith Buchanan, portfolio manager at Globalt Investments. “A lot of people will say that the economy held up because there was more monetary stimulus. Coming into Omicron, that’s not necessarily the case as much as it was in Delta and this is another test of a different flavor. It’s testing if the economy and the market can hold up given the much less accommodative fiscal and monetary policy.”
Investors are looking forward to economic data being released Wednesday morning, including home purchases, existing home sales, GDP and consumer confidence numbers.
CarMax is set to report quarterly earnings before the bell on Wednesday.