Jakarta, CNBC Indonesia – The United States (US) stock market slammed at the close of trading Friday (11/26/2021), triggered by anxiety about the emergence of a new variant of the Covid-19 virus amid trading hours that were halved following the Thanksgiving holiday.
The Dow Jones Industrial Average fell 905 points (-2.5%) to 34,899.34 after briefly sinking 1,000 points to its daily low. The S&P 500 dropped 2.27% to 4,594.62. Meanwhile, the Nasdaq fell 2.23% to 15,491.66.
The correction occurred after officials from the World Health Organization (WHO) warned about the risk of a new variant of Covid-19 spreading in Africa, known as the Omicron variant, while cases of Covid-19 in Europe tended to increase entering the year-end holiday season.
The UK has temporarily suspended flights to and from six African countries in relation to the variant. Two cases were identified in Hong Kong, and one case was identified in Belgium.
Bond prices also increase after yields (yield) 10-year bonds fell 15 basis points to 1.49%. This means that the market is hunting for assets that are considered safe for this risk because of the emergence of risks in the economy.
The Cboe volatility index, which is often referred to as the market anxiety index, rose to 28, its highest in two months. The price of the West Texas Intermediate (WTI) crude oil futures contract fell 12% to below the level of US$ 70/barrel.
Chevron shares plunged 2.3%. Shares of travel issuers were also depressed, such as Royal Caribbean which fell 13.2%. United Airlines and American Airlines shares compactly fell around 9%. Bank shares also fell, including Bank of America (-3.9%) and Citigroup (-2.7%).
On the other hand, Moderna shares rose more than 20%, Pfizer grew 6.1% and Zoom Video grew more than 5%. So far this week, the Dow Jones is down 3.5% while the S&P 500 is down 2.2% and the Nasdaq is down 2%.
“Friday is the day after Thanksgiving—perhaps not many traders are trading with early market closing hours. So the possibility of lower liquidity triggering some reversal,” said BNY Mellon Investor Solutions analyst Ajene Oden was quoted as saying CNBC International.
CNBC INDONESIA RESEARCH TEAM
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