On Wall Street, the end of the pandemic appeared tantalizingly close just a week ago.
After a solid rally on Monday — the S&P 500 rose 1.3 percent, recovering some of the ground lost in a panicky slide on Friday — global markets were sliding again on Tuesday.
“We just have to deal with this, and with any new variants that we get, with a little bit of humility,” said Gargi Chaudhuri, head of iShares Investment Strategy, Americas at the asset management firm BlackRock.
That hasn’t stopped speculation, of course.
The past year has been, overall, a remarkable stretch — the S&P is up nearly 24 percent for the year, in large part because of the arrival of highly effective vaccines.
But the Omicron variant — which triggered travel restrictions almost immediately after it was identified — snapped many people back to those early days.
The threat of a new variant always lurked as perhaps the key source of risk investors faced, even as they largely shrugged off the slowdown caused by the Delta variant over the summer.
In the bond market, investors were boosting bets that the Federal Reserve would start raising interest rates next year, as the economy roared and inflation remained hot.
Unnerving news about the Omicron variant began to emerge from South Africa on Thursday, as Wall Street was closed for the Thanksgiving holiday.
Shares of stay-at-home stocks and vaccine makers soared as investors moved money to parts of the market that did the best during the darkest days of the pandemic.
Powell, said in prepared testimony released before a hearing on Tuesday before the Senate Banking Committee that the Omicron variant posed a variety of risks, including to employment, economic activity and uncertainty related to inflation.