S&P 500 opens higher after Powell comments on inflation, Omicron

Stock futures opened higher Tuesday evening to recover some losses after a selloff earlier in the day, when more hawkish remarks from Federal Reserve Chair Jerome Powell compounded with lingering uncertainty about the Omicron variant and its impact on the economy.

After the index closed Tuesday afternoon, contracts on the S&P 500 went up by nearly 2%. The S&P 500 closed in November with a month drop of 0.8%, with the past week's volatility wiping out previous gains due to the discovery of the Omicron variant. The S&P 500 remained higher by nearly 22% for the year to date through Tuesday's close.

The Dow fell 3.7% in November, while the Nasdaq had a monthly gain of 0.3%.

Some stocks performed more strongly. Pfizer PFE shares closed out their best month since 1991 in November, going up 23% as investors turned to vaccine-makers' shares because of the new coronaviruses variant. Moderna MRNA shares rose 2% in November, despite remarks by CEO Stephane Bancel to the Financial Times saying that the company's current COVID 19 vaccine would likely see a material drop in effectiveness against the Omicron variant, which sent the stock sharply lower during Tuesday's session.

The commentary, along with ongoing uncertainty over the transmissibility and severity of disease caused by the new variant, also contributed to the market drop on Tuesday.

The market doesn't like an information vacuum, and now we have two, Thomas Hayes, Great Hill Capital Chairman, told Yahoo Finance Live. We also had the CEO of Moderna express concern about his vaccines may not have full coverage for Omicron, but then you had Powell throw this wrench into the mix at the hearing saying that maybe we'll speed up taper by a few months. It's no small potatoes, because the market had anticipated over six or seven months that we would get $660 billion of liquidity. Powell told the Senate Banking Committee that it would be appropriate to have the central bank complete its asset-purchase tapering process a few months sooner than previously telegraphed. The market participants had been anticipating that the Fed might take a more supportive position for longer, given concerns over the latest coronavirus variant. Powell suggested that his priority was curbing persistently elevated levels of inflation, and the Fed chair said it was probably a good time to retire his description of inflation as transitory. Charlie Ripley, senior investment strategist for Allianz Investment Management, wrote in an email that Chairman Powell corrected his view on inflation and the potential need for a quicker policy adjustment. The Fed's bond buying program could be ended by the beginning of next year due to the fact that inflation is hot and there is a strong economic backdrop. Powell's comments reinforced the notion that elevated prices are likely to persist well into next year, which ultimately leads to the end of the transitory view on inflation. Market participants should expect more market volatility in this uncharted territory due to the potential changes in policy on the horizon. Here were the main moves in markets as the overnight session kicked off:

Stocks went up in morning trading as investors received more data on the new variant and reports that symptoms have so far been mild for those who have contracted it. Emily McCormick is a reporter for Yahoo Finance.