U.S. futures slipped after the S&P 500 slid from a record. Nasdaq futures are the laggard being down 0.5% on the session.
Investors are watching to see if the uptick in Covid-19 cases and the new Omicron variant changes how quickly the Fed will wind down easy-money policies that have helped fuel this year’s stock rally when it concludes its meeting Wednesday. The central bank is expected to move more quickly to wind down its bond-buying program and signal that it will raise interest rates next year to curb inflation.
The new variant is likely to weigh on the global economic recovery, as some countries implement measures to slow its spread, but is also likely to prolong the labor shortages and supply-chain issues that have stoked inflation.
In bond markets, the yield on the benchmark 10-year Treasury note ticked up to 1.433% from 1.423% Monday. Yields and prices move inversely.
Brent crude futures, the benchmark in global oil markets, rose 0.8% to $74.96 a barrel. On Tuesday, the International Energy Agency said that Omicron’s emergence would “temporarily slow, but not upend, the recovery in oil demand.”
Overseas, the Stoxx Europe 600 index added 0.4%. London-listed shares of Rentokil Initialfell 4.8% after the pest-control company said Tuesday that it would buy Terminix Global Holdings for $1.3 billion in cash and 643.3 million new Rentokil shares in a deal that values the U.S. firm at $6.7 billion.
Major stock indexes in Asia closed lower. Hong Kong’s Hang Seng contracted 1.3% and Japan’s Nikkei 225 shed 0.7%. China’s Shanghai Composite and South Korea’s Kospi each declined about 0.5%.
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