Dow futures jump more than 300 points and oil rises as concerns about Omicron recede, while bitcoin recovers to top $50,000
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- US stock futures looked set to open higher Tuesday as Omicron fears faded, lifting equities.
- UBS expects Omicron "to blend into the existing Delta wave that the global economy is already working through."
- Oil extended gains on Omicron hopes, while bitcoin continued recovering to trade above $50,000.
US stock futures jumped Tuesday, on course for a second day of gains, and oil prices extended their rally as concerns about the impact of the Omicron coronavirus variant subsided.
Futures on the Dow Jones were up 352 points, or 1%, as of 6:50 a.m. ET. S&P 500 futures rose 1.3%, and the Nasdaq moved up 1.8%, indicating a higher start to trading later in the day.
Stocks bounced back on Monday, with the Dow up 646 points, as investors absorbed US medical adviser Anthony Fauci's comments and fresh data suggesting Omicron's impact may not be as severe as feared.
There was growing support among analysts for the view the outbreak will be a near-term headwind for markets but won't derail their march higher.
"Given current information, we expect Omicron to blend into the existing Delta wave that the global economy is already working through," Mark Haefele, chief investment officer at UBS Global Wealth Management, said in a Tuesday note.
"In this scenario, governments enact partial restrictions to limit the spread of the virus, while stopping short of full lockdowns."
Mihir Kapadia, CEO of Sun Global Investments, argued the emergence of Omicron could even ease the economic impact of COVID-19.
"Should the variant cause little to no hospitalization, the rapid transmissibility may also mean we may have an end in sight for the pandemic," Kapadia said.
"In such a scenario, we could perhaps expect 2022 to be the year of bumper returns. But as indicated, nothing is in black and white at the moment, and there is no historical precedent to compare."
In Europe, stocks were also putting in a strong performance early Tuesday. The pan-continental Euro Stoxx 600 gained 1.8%, and Frankfurt's DAX added 2%, while London's FTSE 100 put on 1.1%.
Asian stocks advanced, supported by moves by China's central bank to ease monetary policy. The People's Bank of China said Monday it would free up $188 billion in long-term liquidity to assist economic growth.
The Shanghai Composite moved up 0.2%. Tokyo's Nikkei jumped 1.9%, while Hong Kong's Hang Seng rose 2.7%.
Oil prices extended gains after Monday's near-5% rebound, as fading Omicron concerns lifted hopes that global fuel demand will not suffer as much as previously expected. A delay in the return of Iranian oil also seems to be supporting prices.
Brent crude futures were up 2.6% at $74.98 a barrel, while West Texas Intermediate rose 3% to $71.60.
Meanwhile, the dollar inched 0.13% lower at 96.20, while the 10-year Treasury yield rose 1 basis point to 1.44%.
Bitcoin recovered to top $50,000, as it came back from falling to as low as $42,000 on Saturday. The weekend sell-off was attributed by some analysts to cryptocurrencies taking a lead from the Omicron-driven volatility in markets and the potential for the Fed to decide to cut back on asset purchases faster.
"I don't think this is the end of the bull cycle, and believe this sell-off has given weight to the lengthening cycle theory, where this bull market could extend into 2022, contrary to many analysts' expectations of a blow off top in 2021," said Marcus Sotiriou, sales trader at UK based digital asset broker GlobalBlock.
Bitcoin was last trading 6% higher at $51,427, according to data from CoinMarketCap.
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