US stocks fell on Thursday as the economic threat of restrictions outweighed optimism on the efficacy of existing vaccines against the new Omicron strain.
Both the S&P 500 and Nasdaq 100 dropped, ending the three-day rally. Real estate and energy stocks led the decline.
Treasury bonds, on the other hand, slowed growth after a sluggish resumption of 30-year bond sales.
The cost of containing the Omicron strain has been calculated amid growing concerns that it will impede economic recovery. Bloomberg Economics gave a new guide to working from home in the UK, saying it could cost the country £ 2 billion ($ 2.6 billion) a month. It was based on recent research that said omicron is 4.2 times more infectious than the delta variant.
"Ultimately the issue from a health perspective is that even if Omicron does prove to be less severe, a rise in transmissibility could offset that," strategists at Deutsche Bank said.
Equities also face new hurdles over the upcoming US consumer inflation data. The meeting of the Federal Reserve next week could also provide clues as to when and how the central bank will increase interest rates.
Talking about dollar, a rally was seen on Thursday after a report showed that US jobless claims fell to its lowest level since 1969. Economists noted difficulties with seasonal adjustment to arrive at this figure, but on an unadjusted basis, the number of initial claims increased.
Mike Loewengart, managing director of E*Trade Financial said: "With jobless claims hitting the lowest level in over five decades, this is a loud and clear sign that we're making strides toward a full economic recovery despite some bumps along the way. As full employment seemingly becomes a reality, the Fed will be forced to focus more on taming inflation, which has no doubt been an ongoing concern for investors."
Other key events to watch out for today are:
- speech of ECB President Christine Lagarde;
- US CPI.