Dec 1, Reuters -- Wall Street's main indexes were set to bounce back on Wednesday after a sell-off triggered by concerns over rising inflation and the new Omicron coronavirus variant, while shares of Merck rose on progress in the approval of its COVID 19 pill.
After a panel of advisers to the U.S. Food and Drug Administration narrowly voted to approve the drugmaker's antiviral pill to treat COVID - 19, Merck Co Inc gained 1.1% in premarket trading.
After Federal Reserve Chair Jerome Powell spoke to the Senate Banking Committee on Tuesday, he said that he no longer considers inflation as transitory. Powell said that the U.S. central bank would consider bringing forward plans for a tapering of its bond buying program at its next meeting in two weeks.
Most investors realized that the Fed was going to have to shift course, and there's a lot of people who feel that inflation is a bigger problem, and maybe a bigger risk to the market is the Fed failing to take any action, said Rick Meckler, partner, Cherry Lane Investments in New Vernon, New Jersey.
We are going to see a lot of back and forth coming to the end of the year, where markets can be a bit less liquid, and we are likely to see some back and forth on Omicron investors until we get more information on the current economic conditions, which is known as the Beige Book, to get more insight into the central bank's position on inflation. On Tuesday, Powell made a double whammy for markets who were already nervous about the spread of the Omicron variant and its potential to hinder a global economic recovery.
A World Health Organization official said that most Omicron cases were mild, with none serious, and that the Fed chair is due to testify before a House Financial Services Committee hearing at 10 a.m.
Cruise lines Norwegian Cruise Line, Carnival Corp and Royal Caribbean went up between 2.2% and 3.2%, with travel and leisure stocks rebounding.
Occidental Petroleum, which led gains among energy stocks, was up 3.4% as oil prices climbed 3%. After steep falls on Tuesday, Wall Street shares of major Wall Street lenders moved higher.
The Dow e-minis were up 300 points, or 0.87%, according to the ET.
The S&P 500 e-minis increased 55.5 points, or 1.22%, and Nasdaq 100 e-minis were up 212.5 points, or 1.32%, supported by shares of Amazon.com, Apple Inc., Tesla Inc., Alphabet Inc., Meta Platforms and Microsoft Corp. All these tech companies added between 1.2% and 1.7%.
U.S. private employers maintained a strong hiring pace in November, according to the data. After market open, there will be a reading on manufacturing activity.
Salesforce.com Inc said its current-quarter profit was below estimates, as it faces stiff competition from rivals, including Microsoft, which sent its shares down 6.2%.