Futures pointed to a rebound for stocks on Tuesday following three-days of losses amid fears about the fast-spreading Covid omicron variant.
Futures on the Dow Jones Industrial Average gained 329 points, or 0.9%. S&P 500 futures rose about 1% and Nasdaq 100 futures added 1.1%.
The blue-chip Dow dropped more than 400 points for its third straight declining session on Monday. The S&P 500 and the Nasdaq Composite both declined more than 1% Monday. The S&P’s three-day drop of 3% was its worst such showing since September. The Dow lost nearly 1,000 points over the previous three sessions.
Reopening plays saw some relief buying on Tuesday. Royal Caribbean, Carnival, Wynn Resorts were all bouncing by about 1% in premarket trading Tuesday.
Micron shares surged nearly 8% in premarket trading after the memory-chip maker posted much better than expected earnings for the prior quarter and gave bullish guidance. The company expects earnings of $1.95, plus or minus 10 cents, this period, a range higher than the consensus estimate of $1.84 collected by FactSet. Other chipmakers gained in premarket trading with KLA Corp. up 3% and Nvidia up 2%.
The omicron surge has kept investors on edge with the variant now found in at least 43 U.S. states and 90 countries. Officials with the World Health Organization said omicron is more contagious than any previous variant of Covid-19. It accounted for 73% of new infections in the U.S. last week, federal health officials said Monday. The NHL hockey league is beginning its holiday break early because of Covid outbreaks postponing games.
Monday’s stock sell-off erased the S&P 500’s earlier gains in December, to flatline for the month; Dow is up about 1.3%, while the Nasdaq is down nearly 3.6% and is on pace to snap a two-month winning streak.
“As we head into the shortened holiday week amid surging omicron cases, continued supply chain pressures and the failure of the Build Back Better plan, increased volatility and thinner trading volumes could cause the market to overreact, which could be a buying opportunity in the run-up to Christmas,” said Mark Hackett, Nationwide’s chief of investment research.
Investors also assessed the prospect for President Joe Biden’s economic agenda. The Senate will vote on Biden’s sweeping social safety net and climate policy bill in January, despite Democratic Sen. Joe Manchin’s opposition to it. It is unclear if Democrats will try to pass a smaller bill that includes only parts of the full package.