US stocks rose on Wednesday, with the S&P 500 posting its largest three-day rally in a year. The Nasdaq 100 also increased as concerns over the omicron variant began to subside after Pfizer and BioNTech said early laboratory tests showed a third dose of their vaccines would neutralize the strain.
"Risk assets are recovering this week after a bout of turbulence sparked by the emergence of the new virus variant," said Art Hogan, chief market strategist of National Securities. "Early studies showed vaccines provide a partial shield against the new variant. So far, omicron cases haven't overwhelmed hospitals and vaccine developments are encouraging."
Travel stocks surged after American Airlines, Delta Air Lines and United Airlines posted gains. But losses in consumer goods and finance weighed on the market as tech stocks struggled to gain direction.
Wall Street analysts expect the market to remain volatile until there is more clarity on the threat of omicron to the economy. If it turns out low, the market will return its focus to the Federal Reserve's policy decisions.
"We're really in a new regime here," said BNY Mellon equity head Alicia Levin. "With that comes implications for asset classes."
Meanwhile, Tim Courtney, chief investment officer of Exencial Wealth Advisors, said: "I don't think you have an easy time pointing to one particular news item each day over the last several days that's caused it. We've gone 20 months and still have not had a correction, and I think that is fueling some volatility."
Other important events scheduled for this week are:
- speech of Minneapolis Fed President Neel Kashkari (Thursday);
- speech of Bank of Australia Governor Philip Lowe (Thursday);
- China CPI, PPI money supply, new yuan loans, aggregate financing (Thursday);
- US CPI (Friday).
