Wall St set to open 1% higher as tech stocks roar back

U.S. stocks looked set to open 1% higher on Tuesday as technology firms bounced back on easing concerns around the Omicron variant, while Intel jumped after plans to take its self-driving car unit public.

Investors cheered the chip giant’s decision to list Mobileye in the United States in mid-2022, sending its shares 7.7% higher in premarket trading. Other chipmakers including Advanced Micro Devices, Micron Technology and Nvidia also rose.

U.S. stock indexes closed higher on Monday as optimistic comments from a top U.S. official about Omicron encouraged investors. The CBOE volatility index, too, eased from a 10-month high it hit last week, when fears around the new virus strain and the Federal Reserve’s hawkish comments about a speedier taper rattled investors.

“With yesterday’s rally, investors are starting to get their minds around the fact that the Fed is likely tapering for the right reasons,” said Art Hogan, chief market strategist.

“And the second thing is that there’s been a diminishing economic impact of every new variant of the coronavirus since the pandemic began.”

The bounce underlined a rebound in high-flying growth stocks, which were battered in recent days as investors rotated into sectors like energy, banks that stand to perform better in a tightened U.S. monetary policy environment.

Big Tech stocks Google-owner Alphabet, Microsoft, Amazon and Apple gained nearly 2%.

Tesla Inc added 3.4% after dropping into bear market territory, or 20% off its record high close, on an intraday basis on Monday.

“We think that in 2022, markets will continue to see periods of optimism and pessimism on both inflation and growth, and flip-flop between those views until there is more clarity,” said Willem Sels.

Goldman Sachs Chief Executive David Solomon anticipates inflation will be higher for a period and that equity returns are likely to slow in the next few years.

At 8:11 a.m. ET, Dow e-minis were up 347 points, or 0.99%, S&P 500 e-minis were up 59.75 points, or 1.3%, and Nasdaq 100 e-minis were up 285.5 points, or 1.8%.

Shares of Vir Biotechnology jumped 8.1% after British drugmaker GSK said an antibody-based COVID-19 therapy it is developing with Vir is effective against all mutations of the Omicron variant.

Travel shares continued the momentum, with Norwegian Cruise Line and American Airlines leading the gains among the major airlines and cruise operators. American Airlines also announced the retirement of Chief Executive Officer Doug Parker.

Oil stocks including Exxon Mobil and Chevron Corp rose, tracking gains in crude prices.

Merck & Co fell 1.6% as Guggenheim downgraded the stock to “neutral” from “buy” after the drugmaker paused enrollment in two late-stage clinical trials testing its experimental drug for HIV prevention before exposure to the virus.

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