Stocks and oil prices tumble as Moderna CEO says current vaccines will struggle with Omicron

Stocks in Asia-Pacific and Europe fell, while Wall Street has opened weaker. Oil prices fell about 3% as more countries reported variant cases and imposed new travel restrictions. The mood was also tempered by a warning from Moderna CEO Stéphane Bancel that current vaccines will struggle with Omicron.

“There are no people, I think, where [the effectiveness] is of the same level. . . we had with [the] Delta [variant]”Bancel said in a Financial Times interview published Tuesday.” I think it’s going to be a big drop. I don’t know how much because we have to wait for the data. But all the scientists I’ve talked to … tell me, “It’s not going to be right.”

European indices opened around 1% less before reducing those losses a bit during the session.

There is still a lot of unknowns about the Omicron variant, but scientists are rushing to determine its severity, transmissibility, and whether it eludes current vaccines.

Bancel de Moderna said in a statement last week that the Omicron variant mutations were “relevant”, adding that the company “was moving as fast as possible to execute our strategy to combat this variant.”

The world has settled into a “model of restless waiting, for clarity on [how] worried, or not, we should be about the new variant of Covid-19 Omicron, ”wrote Jeffrey Halley, senior market analyst for Asia-Pacific in Oanda, in a research note on Tuesday.

He pointed out that shares fell in South Korea after that country’s government put aside plans to ease its Covid-19 restrictions, “once again highlighting what is really driving the markets right now.” .

Japan, meanwhile, confirmed its first case of the Omicron variant on Tuesday.

US stocks made a comeback on Monday after a massive selloff prompted by Omicron late last week. But they opened lower on Tuesday, then extended their losses after Federal Reserve Chairman Jerome Powell said the Fed may end its stimulus measures. earlier than expected.

“At this point the economy is very strong and inflationary pressures are high and therefore it is appropriate, in my opinion, to consider concluding the reduction in our asset purchases … maybe a few months earlier”, Powell told the Senate.

At 11:15 a.m.ET, the Dow (UNDUE), S&P 500 (DEP) and Nasdaq (NDX) were all down about 1.3%.

Oil prices are also falling, after collapsing on Friday over concerns that the variant could hurt energy demand by reducing the number of people driving and taking flights. Brent crude, the global benchmark, and West Texas Intermediate, the US benchmark, fell more than 3% to trade below $ 71 and $ 68 a barrel, respectively.

– CNN’s Junko Ogura contributed to this report.

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Felix J. Dixon