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Market Plummets 800 Points amid Discovery of New COVID Variant in South Africa

(Lucas Jackson/Reuters)

The discovery of a new COVID variant in South Africa sent U.S. stock indexes plummeting on Friday, triggering financial-market uncertainty as well as travel and commercial restrictions in a number of nations in the continent and in Europe.

At the open of the market, the Dow Jones Industrial Average dipped nearly 835 points, or 2.3 percent, indicating a large sell-off in assets among traders responding to the development. The S&P 500 dropped 1.4 percent at the start of the day, while the Nasdaq Composite Index slumped 0.9 percent.

Amid fears that the new version of the virus could be more infectious and vaccine resistant than the Delta variant, which has defied the vaccine in terms of prevention in some cases, the World Health Organization conducted an emergency scientific review of the strain Friday.

At the meeting, the WHO classified the new variant as a highly transmissible virus of concern, naming it “Omicron.” The agency said that the first known confirmed case was from a sample collected on November 9.

Brent crude oil also took a hit, deceasing 5 percent to under $77 a barrel, a record dip since July. Cryptocurrency tumbled as well, with Bitcoin reaching below $55,000 after hovering around $60,000 for much of the last week.

Investors looking to evade risk piled into more stable securities such as Treasury bonds, the yields of which sunk in accordance with their inverse relationship with prices, as well as gold.

While financial markets had calmed to the COVID storm for many months, shifting its sensitivity to inflation worries, unfettered fiscal stimulus, and the national debt, Friday’s market downslide appears to be a preemptive reaction to an impending COVID wave.

Scientists seem to suggest that the new variant, called B. 1.1.529, has many mutations that could make it more transmissible and render the protective mechanism of the vaccine and natural immunity provided by previous infection less potent. The WHO will meet Friday to determine if it is a “variant of concern.”

Many scientists had already anticipated a winter wave of the disease, in which confirmed cases spike during the cold weather and holiday season, but the new variant may pose a unique challenge to economies and medical systems.

As the efficacy of summer vaccinations starts to wane, the United States and many other Western countries are pushing the booster shot to provide the immunocompromised and other vulnerable populations an added layer of health defense.

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