The stock market moved up across the board, reversing Tuesday's fall.
On Wednesday, stock markets went up as investors used the dip in prices to begin December by betting the latest COVID 19 variant would not derail the economic recovery, as the latest version of the COVID- 19 variant reversed much of the previous session's losses.
During the week, the EUROSTOXX rose 0.91%, while Britain's FTSE 100 rallied 1.24% and Germany's DAX 1.39%. Wall Street futures pointed to a strong open with both the S&P 500 and Nasdaq 100 showing up more than 1% of the MSCI's gauge of stocks. The previous day, investors were frightened by the warning from Moderna that existing vaccines are unlikely to be as effective against the Omicron variant.
Countries have tightened restrictions and imposed travel restrictions on parts of the world.
The global markets were under pressure on Tuesday after Federal Reserve Chair Jerome Powell said asset purchases might need to be tapered faster to fight rising inflation.
In Asia, stocks rose by 1.1% as traders reversed course after a selloff the day before the regional benchmark fell to a 12 month low.
Market focus should shift away from Omicron and towards positive growth and earnings trajectory, and allow equities to resume their upward course, and for some of the cyclical markets particularly negatively affected by recent developments, such as Japan, the Eurozone, energy and financials, to outperform, said Mark Haefele, chief investment officer at UBS Global Wealth Management.
Oil rebounded after a steep fall in the previous session, ahead of a meeting of the Organization of the Petroleum Exporting Countries OPEC U.S. West Texas Intermediate WTI crude futures rose 3.88%, to $68.75 a barrel. Brent crude futures gained 4.54%, to $72.37 a barrel, but they were way below the levels of $82 a barrel seen last week.
Despite the bullish sentiment on Wednesday, some analysts said markets would be wise to focus on Fed Chair Powell's latest comments.
He said on Tuesday that U.S. central bankers would discuss whether to end their bond purchases in December or not in December.
The market focus is on Omicron and the potential that can disrupt the world, but the real focus should be on the Fed and rate policy. Kerry Craig, global market strategist at JPMorgan Asset Management, said that's the biggest shock to come out of the last day or so.
Powell's comments had pushed the U.S. Treasury yield higher, especially at the short end of the curve.
The yield on two-year notes, which reflects short-term interest rate expectations, rose to as high as 0.622% on Wednesday, up from as low as 0.4410% on Tuesday, when traders speculated that the new variant could lead to a more dovish Fed.
The 2 year yield was last trading at 0.603%, up 1 basis point.
The last quarter of the 10-year Treasury yielded 1.494%, up from Tuesday's two-and-a-half month low of 1.444%.
The dollar was steady against most peers, but gained ground on the Japanese currency because of rising yields in the United States. It rallied 0.2% against the safe haven yen to 113.38 yen.
The euro dollar was flat at $1.133, leaving it close to the 17 month lows of $1.1186 last week.
The Australian dollar rose by 0.4% from Tuesday's 13 month low.
Emerging market stocks and some currencies rebounded, despite the fact that they are risk sensitive. After the central bank said it had intervened due to unhealthy market prices, the Turkish lira increased by as much as 5% from near record lows.
Despite all the excitement, gold saw little safe-haven demand with the spot price at $1,786 an ounce, up 0.7%.