U.S. stocks rebounded firmly Wednesday, while Treasury bond yields held gains and oil prices rallied ahead of this week's meeting of OPEC leaders in Vienna, as investors continue to work through the impact of a suddenly-hawkish Federal Reserve and the uncertainty linked to the Omicron variant.
The early gains were extended, as well, by a stronger-than-expected reading of private sector job gains in the month of November from payroll processing group ADP, which could signal robust figures from Friday's BLS employment report.
Fed Chair Jerome Powell's comments to the Senate Banking Committee yesterday shocked a market that was already unnerved by concerns that current vaccine may lose their efficacy against Omicron, sending Treasury yields higher and stocks sharply lower in heavy trading volumes.
Around 60 countries have imposed new or tighter travel and border restrictions since Omicron was identified last week, according to the World Health Organization, with cases now confirmed in two dozen different nations, including Japan, Australia, Great Britain, Spain and Sweden.
However, Powell's suggestion that the Fed could 'wrap up' the process of tapering bond purchases 'a few months early' is also accelerating bets on mid-2022 rate hikes, with the CME Group's FedWatch tool now pricing in a 77% chance of a July move.
Along with reports of easing supply chain bottlenecks from top-tier companies such as Walmart (WMT) - Get Walmart Inc. Report and Volkswagen, as well as an improving economic picture from the Atlanta Fed's GDPNow forecasting tool, stocks look set to start the month of December -- a traditionally strong one for equities -- with solid opening bell gains.
The Dow Jones Industrial Average jumped 415 points in the opening hour of trading, while the S&P 500 gained 6 points. The tech-focused Nasdaq Composite moved 195 points higher as benchmark 10-year Treasury note yields eased to 1.478%, in early New York trading.
Merck & Co. (MRK) - Get Merck & Co., Inc. Report shares were a notable early gainer, rising 1.3% in pre-market trading after an advisory panel to the U.S. Food & Drug Administration recommended the emergency authorization of its Covid antiviral treatment.
Zscaler (ZS) - Get Zscaler, Inc. Report stock jumped 2.5% after the cybersecurity company reported earnings, revenue and billings for its fiscal first quarter that topped Wall Street targets.
Exxon Mobil (XOM) - Get Exxon Mobil Corporation Report shares gained 2% after the biggest U.S. oil company unveiled plans to boost capital spending on low carbon projects as it moves forward under a new board comprised of activist climate-focused investors.
On the downside, Salesforce (CRM) - Get salesforce.com, inc. Report shares slumped 5.75% after the group forecast softer current quarter profits amid intensifying competition in the cloud and business software market and unveiled big changes to its top management team.
In overseas markets, Europe's Stoxx 600 bounced 1.2% higher in Frankfurt as data showed factory activity in the month of November rising firmly above the 50-point mark that separates growth from contraction even amid supply chain disruptions and a worrying wave of coronavirus infections around the broader European region.
In Asia, the region-wide MSCI ex-Japan index rebounded 1.18% heading into the final hour of trading while the Nikkei 225 ended 0.41% higher Tokyo.
In other markets, oil prices rallied as advisors to OPEC leaders began meetings today ahead of a larger cartel summit later this week, with prices buoyed but improving demand optimism and stronger-than-expected factory activity data from Europe, which offset another poor set of data from China.
WTI futures for January delivery were marked $2.16 higher from last night's closer at $68.14 per barrel while Brent contracts for the same month, the global pricing benchmark, jumped $2.18 to $71.40 per barrel.