Stock Market Today: Dow Drops 652 Points After Powell Signals Faster Taper
Despite a looming threat from the COVID omicron variant, the Fed is likely to discuss speeding up the tapering of its asset-buying program.


The Wall Street pendulum swung back to selling early Tuesday amid the growing COVID omicron threat and a surprising cue from the Fed.
Seemingly setting up today's actions was Jake Wujastyk, chief market analyst for technical analysis software firm TrendSpider, who told Kiplinger late Monday that "This week will be all about digesting the current scientific information available and seeing if lockdowns or mandates come back into play," adding that Federal Reserve Chair Jerome Powell's multiple speaking engagements this week could also be a market mover.
He was correct on both counts.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Triggering Tuesday's premarket weakness were overnight comments by Moderna (MRNA, -4.4%) CEO Stéphane Bancel, who told Financial Times he believed there would be a "material drop" in the efficacy of current COVID vaccines against the new strain.
But stocks pulled back even further after the Fed chief told the Senate Banking Committee that in light of a strong economy and high inflationary pressures, he considered it appropriate to wrap up the central bank's tapering of asset purchases "perhaps a few months sooner" than originally planned.
"The reality is hotter inflation coupled with a strong economic backdrop could end the Fed's bond buying program as early as the first quarter of next year," says Charlie Ripley, senior investment strategist for Allianz Investment Management. "Ultimately, the transitory view on inflation has officially come to an end as Powell's comments reinforced the notion that elevated prices are likely to persist well into next year. With potential changes in policy on the horizon, market participants should expect additional market volatility in this uncharted territory."
The Dow Jones Industrial Average (-1.9% to 34,483) was led lower by the likes of Salesforce.com (CRM, -4.0%), Travelers (TRV, -3.6%) and Coca-Cola (KO, -3.2%). The S&P 500 (-1.9% to 4,567) and Nasdaq (-1.6% to 15,537) also took a tumble.
"The travel and tourism trade is struggling the most here given the looming prospect of further travel restrictions going into early 2022," says David Keller, chief market strategist at StockCharts.com. "Hotels, cruise lines, and airlines appear especially vulnerable and are breaking key support levels as investors move their capital elsewhere."
Other news in the stock market today:
- The small-cap Russell 2000 declined 1.9% to 2,198.
- U.S. crude futures plunged 5.4% to settle at $66.18 per barrel.
- Gold futures retreated 0.5% to end at $1,776.50 an ounce.
- Bitcoin was off 1.0% to $57,555.73. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.)
- Apple (AAPL) was the only Dow stock to finish in the green today, adding 3.2% to close at a record $165.30. Based on its Oct. 29 close at $149.80, AAPL finished November up 10.3%, marking its best monthly performance since June, when it tacked on 9.9%. The stock is certainly well-liked by Wall Street's pros. Of the 44 analysts covering Apple tracked by S&P Global Market Intelligence, 27 say it's a Strong Buy and seven call it a Buy. This compares to eight Holds, one Sell and one Strong Sell.
- Dollar Tree (DLTR) was a notable decliner today, sliding 5.3% after Goldman Sachs analyst Kate McShane downgraded the retail stock to Neutral (Hold) from Buy. The shares jumped more than 9% last week on stronger-than-expected earnings and news of broad price hikes at its stores, and the analyst believes "expected improvements are now priced in the stock."
Omicron Puts Investors on Red Alert
The omicron variant's largest danger to the market right now is the uncertainty about its danger.
"Investors fear a worst-case scenario variant that could send many parts of the world back to the dark days of 2020. With many major economies now experiencing cold weather, and lockdowns in some European countries, this would only add to problems and exert downward pressure on stocks, especially more cyclically sensitive equities," says Invesco Chief Global Market Strategist Kristina Hooper, who notes that it will likely be weeks before there's any concrete knowledge to work with.
"Sectors that may be better protected include technology, healthcare and utilities," she adds, while the most vulnerable areas include travel and leisure, general retail and basic materials.
That latter sector is the latest focus of Kiplinger's 2022 investing outlook.
As of just a few days ago, materials stocks had plenty going for them – namely, a continuing global economic recovery and a gusher of fresh infrastructure spending from the U.S. government. The omicron variant potentially threatens the former.
That makes materials tricky to deal with in the short term, but opportunistic investors might want to take advantage of price dips to buy high-quality sector picks like these 12 best material stocks for 2022.
Disclaimer
Kyle Woodley was long CRM as of this writing.
Kyle Woodley is the Editor-in-Chief of Young and The Invested, a site dedicated to improving the personal finances and financial literacy of parents and children. He also writes the weekly The Weekend Tea newsletter, which covers both news and analysis about spending, saving, investing, the economy and more.
Kyle was previously the Senior Investing Editor for Kiplinger.com, and the Managing Editor for InvestorPlace.com before that. His work has appeared in several outlets, including Yahoo! Finance, MSN Money, Barchart, The Globe & Mail and the Nasdaq. He also has appeared as a guest on Fox Business Network and Money Radio, among other shows and podcasts, and he has been quoted in several outlets, including MarketWatch, Vice and Univision. He is a proud graduate of The Ohio State University, where he earned a BA in journalism.
You can check out his thoughts on the markets (and more) at @KyleWoodley.
-
-
Should I Trade Stocks or Options?
Answering the question "should I trade stocks or options" will depend on your own risk tolerance, investing objectives and understanding of market dynamics.
By Jared Hoffmann Published
-
This Is How You Can Be a Snowbird in Retirement
There’s a lot to consider, and warm weather shouldn’t be the only deciding factor. For instance, will you rent or buy? What’s the tax and health care situation?
By Tony Drake, CFP®, Investment Advisor Representative Published
-
Stock Market Today: Stocks Lose Steam as Fed Hangover Lingers
Stocks attempted to bounce back from recent Fed-induced losses Friday, but struggled to stay higher through the close.
By Karee Venema Published
-
Stock Market Today: Stocks Head South as Treasury Yields Hit New Highs
Expectations for another potential rate hike sent yields on both the 2-year and 10-year Treasury bonds to their highest levels in almost two decades.
By Karee Venema Published
-
Stocks Close Lower After Hawkish Fed Pause
The major indexes finished in the red after the Federal Reserve kept interest rates unchanged, but left open the possibility of one more rate hike.
By Karee Venema Published
-
Stock Market Today: Stocks Drop Ahead of Fed Announcement, Klaviyo IPO
Instacart's successful IPO stood out in an otherwise down day on Wall Street.
By Karee Venema Published
-
Stock Market Today: Stocks Close Flat With Fed Meeting in Focus
A choppy session for stocks turned into a flat finish as investors looked ahead to Wednesday's Fed announcement.
By Karee Venema Published
-
What Are FAANG Stocks?
The "FAANG" acronym is used to describe a group of popular tech and tech-adjacent stocks. But what are FAANG stocks and are they a good investment?
By Tom Taulli Published
-
Stock Market Today: UAW Strike Sends Stocks Lower
The main benchmarks ended the week with a thud as contract negotiations between the Big 3 automakers and the United Auto Workers stalled.
By Karee Venema Published
-
Stock Market Today: Stocks Rise After PPI Report, Arm IPO
The main indexes closed comfortably higher, while Arm stock soared on its first day of trading.
By Karee Venema Published