A Wall Street sign is visible in front of the New York Stock Exchange (NYSE) in New York, New York, United States on July 19, 2021. REUTERS / Andrew Kelly

Nov. 30 (Reuters) – Major Wall Street indices closed lower on Tuesday after Federal Reserve Chairman Jerome Powell signaled that the US central bank would consider accelerating its withdrawal from bond purchases as Inflation risks are increasing, putting pressure on an already nervous market over the latest COVID-19 Variant.

In testimony to the Senate Banking Committee, Powell said he no longer viewed high inflation as “transient” and that the Fed would reconsider the timeline for cutting its bond purchase program at its next meeting in two weeks. Read more

“Powell’s comments threw a monkey in the key to market thinking in terms of a potential reduction schedule. As a result, you see a reduction in risk across the board,” said Michael James, chief operating officer at shares at Wedbush Securities in Los Angeles.

“You also need to take into account the concerns of the Omicron variant. You may wonder if this is more of an overall risk or a real risk, but regardless, it has a significant impact on oil and anything related to economic growth. “

Powell’s comments also sparked speculation among some investors about a potential acceleration in interest rate hikes.

“The main contributor to the decline in stock prices today is Powell’s comment, regarding the next Fed meeting, on stepping up the cut in their bond buying program, which obviously leads to the prospect that the rate hikes will occur earlier next year, “said Mark Luschini. , Chief Investment Strategist at Janney Montgomery Scott in Philadelphia.

“This somewhat hawkish change in tone caught the market off guard,” Luschini said.

Meanwhile, the market has also waited for information on the dangerousness of the Omicron variant, the degree of protection of current vaccines, and any additional restrictions governments may need to impose that could hurt the economy, Luschini said.

The Dow Jones Industrial Average (.DJI) lost 652.22 points, or 1.86%, to 34,483.72, the S&P 500 (.SPX) lost 88.27 points, or 1.90%, to 4 567 and the Nasdaq Composite (.IXIC) lost 245.14 points, or 1.55%, to 15,537.69.

For the month, the S&P was down 0.8%, while the Dow Jones fell 3.7% and the Nasdaq gained 0.25%.

Only seven of the benchmark components of the S&P 500 gained ground on Tuesday.

For the day, the top 11 sectors of the S&P industry fell, with seven of those sectors falling more than 2%. Communication services (.SPLRCL) led the losses with a decline of 3%, followed by utilities (.SPLRCU) of 2.9%. As oil prices fell, energy (.SPNY) was under pressure throughout the session, closing down 2.5%. Read more

Information Technology (.SPLRCT) was the top performer, dropping just 0.96%, with help from Apple Inc (AAPL.O), which posted a record closing and gain 3.2% for the day.

Tuesday’s drop was a sharp reversal after Monday’s rally in which stocks regained ground they lost on Friday when the market quickly sold off on news of the virus variant.

“The market is clearly in dangerous waters right now. You have suffered two major setbacks in the last three trading days. It certainly shakes some of the complacent buyers in the market,” said James of Wedbush.

While the Food and Drug Administration said it hoped to have information on the effectiveness of current COVID-19 vaccines against Omicron, vaccine makers were divided.

The CEO of BioNTech (22UAy.DE) said the vaccine his company is providing in partnership with Pfizer (PFE.N) will likely offer strong protection against serious disease in variant cases. But the CEO of Moderna Inc (MRNA.O) told the Financial Times that COVID-19 injections are unlikely to be as effective against the new variant as they were before. Read more

Moderna shares fell 4.4% while Regeneron Pharmaceuticals Inc (REGN.O) lost 2.7% after saying its treatment with COVID-19 antibodies and other similar drugs may be less effective against Omicron . Read more

Travel and leisure stocks slumped, the S&P 1500 Hotels, Restaurants and Leisure (.SPCOMHRL) indices fell more than 2% while the S&P 1500 Airlines index (.SPCOMAIR) fell 0.6%.

The Russell 2000 Small Cap Index (.RUT) fell 1.9%.

Uncertainty over the virus has raised new alarms as supply chain bottlenecks weigh on economic recovery and central banks around the world consider a return to pre-pandemic monetary policy to cope to soaring inflation.

Meanwhile, data showed U.S. consumer confidence plummeted in November amid concerns over the rising cost of living and the relentless COVID-19 pandemic. Read more

Falling issues outnumbered advancing ones on the NYSE by a ratio of 3.82 to 1; on the Nasdaq, a ratio of 2.40 to 1 favored the declines.

The S&P 500 posted seven new 52-week highs and 45 new lows; the Nasdaq Composite recorded 28 new highs and 572 new lows.

Tuesday recorded the highest volume trading session for U.S. stock exchanges since June with 16.13 billion shares changing hands, compared to an 11.12 billion moving average for the past 20 sessions.

Reporting by Devik Jain and Ambar Warrick in Bengaluru, Sinéad Carew in New York, Kevin Buckland in Ottawa, editing by Marguerita Choy and Sriraj Kalluvila

Our Standards: The Thomson Reuters Trust Principles.