U.S. stocks dropped sharply on Friday as a new mutant Covid variant found in South Africa triggered a downward shift in economic expectations and increased fears of a potential recession.
The Dow Jones Industrial Average fell 905.04 points, or 2.53%, for its worst day of the year, closing at 34,899.34. The S&P 500 dropped 2.27% to close at 4,594.62, while the Nasdaq Composite declined 2.23% to finish at 15,491.66. The Dow was down more than 1,000 points at session lows. The Dow’s drop was larger than other big drops this year, such as the 2.09% drop on July 19.
The declines came after World Health Organization officials warned on Thanksgiving about a new Covid-19 variant that is spreading rapidly in South Africa. The new variant contains more mutations to the spike protein, the component of the virus that binds to cells, than the highly contagious delta variant. Because of these mutations, scientists fear it could have increased resistance to vaccines, though WHO said further investigation is needed. On November 26, the WHO deemed the new strain a “variant of concern” and named it omicron.