On the heels of the Federal Reserve’s Powell omicron and an inflation warning, the stock market fell sharply.

After Federal Reserve Chair Jerome Powell warned that the omicron variant could lead to a speedier route to tapering, U.S. stocks took a significant hit.

The Dow Jones Industrial average dropped more than 500 points, or 1.5%, while the S&P 500 and the Nasdaq Composite also fell 1.4%.

Federal Reserve Chairman Jerome Powell told Congress on Tuesday that the omicron type could necessitate a faster pace of tapering than originally anticipated. It will be around ten days before the United States has a clearer picture of the variation.

The word “transitory,” which is frequently used by the Federal Reserve to describe inflation, no longer makes sense, he said.

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We will utilise our tools to ensure that rising inflation does not become entrenched, he added. “I think you’ve seen what you’ve seen,” he said.

In the stock market, vaccine manufacturers continue to command a large share of the market. COVID-19 vaccinations are expected to be substantially less effective against the new omicron version, Moderna’s CEO said in an interview with the Financial Times.

Additionally, Regeneron’s COVID cocktail may be less effective against the variation. Shares of the company plummeted. Pfizer confirmed this to Fox Business:

“Pfizer and BioNTech are constantly monitoring for new varieties of the virus that may be able to evade our vaccine’s protection. As soon as possible, we will commence neutralising experiments on the new Omicron strain of concern to gather preliminary data.”