U.S. stocks rebound as Omicron uncertainty eases

U.S. equities followed European stocks higher, rebounding from Friday’s selloff as investors took comfort in reports that cases of the omicron variant have been relatively mild.

U.S. equities followed European stocks higher, rebouning from Friday’s selloff as investors took comfort in reports that cases of the omicron variant have been relatively mild. 

Oil rose after Saudi Arabia boosted the prices of its crude, signaling confidence in the demand outlook. The 10-year Treasury yield advanced to 1.38 per cent and the dollar was little changed.

The S&P 500 rose 0.5 per cent while the tech-heavy Nasdaq 100 underperformed with a 0.1 per cent loss. In Asia, tech losses were more severe. The Hang Seng Tech Index closed at the lowest level since its inception. Meanwhile, SoftBank Group Corp. fell as much as 9 per cent in Tokyo trading as the value of its portfolio came under more pressure. 

“Markets are seeing some relief this morning, so any resumption of volatility might not come immediately,” Matt Maley, chief market strategist at Miller Tabak + Co., said. “The good news is that as bad as the stock market seemed last week, we really didn’t see much technical damage.”

The mood across markets was calmer on Monday after last week’s big swings in technology companies and a crash in Bitcoin over the weekend. Investors pointed to good news from South Africa that showed hospitals haven’t been overwhelmed by the latest wave of COVID cases. 

Initial data from South Africa are “a bit encouraging regarding the severity,” Anthony Fauci, U.S. President Joe Biden’s chief medical adviser, said on Sunday. At the same time, he cautioned that it’s too early to be definitive.