Market Snapshot: Stock futures point to a bounce as investors continue to gauge omicron and Washington politics

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U.S. stock futures were rising on Tuesday, following a sharp selloff driven by concerns over the omicron coronavirus variant and the fate of a key spending bill for the administration of President Joe Biden.

How are stock-index futures trading?

On Monday, the S&P 500

fell 1.1% to 4,568.02, the largest one-day point and percentage decline since Dec. 1, based on Dow Jones Market Data. The Dow Jones Industrial Average

 closed 433.28 points, or 1.2%, lower at 34,932.16, its weakest since Dec. 3. The Nasdaq Composite Index 

dropped 1.2% to 14,980.94, the lowest since Oct. 15.

What’s driving the market?

Monday’s volatile action saw the S&P 500 post its biggest three-day percent slide since Sept. 30 and the Nasdaq’s worst such drop since May 12. Markets were hit first by surrounding fears over rising COVID-19 cases from the omicron variant.

Investors are trying to gauge just how much the new omicron variant of coronavirus will slow economic growth, just as central banks are reining in their pandemic-aid spending.

The second blow came Sen. Joe Manchin (D-W.Va.) said on Sunday that he couldn’t support Biden’s$2 trillion spending plan. “That’s $2 trillion that won’t hit the market so soon and help companies boost business at a time when the Federal Reserve (Fed) will be throwing less money onto the financial markets,” said Ipek Ozkardeskaya, senior analyst at Swissquote, in a note to clients.

But the mood shifted some on Tuesday, amid a report on Bloomberg that Manchin and Biden spoke on Sunday evening, as a Washington source said that chat likely left the door open to further negotiations.

“With the rising volatility, we could see Santa taking back the reins from Manchin for the next couple of sessions. Low trading volumes could help exacerbate any rebound,” said Ozkardeskaya.

Some are keeping an eye on Biden himself, after he tested negative for COVID-19 on Monday, following close contact three days earlier with an aide who tested positive, the White House said. He will test again on Wednesday, and carry on with his normal schedule.

Traders checking out early for the holidays, leaving less liquidity and exaggerating some market moves, are also a hurdle for those trying to navigate a shortened week of trading. Markets will close on Friday, Christmas Eve.

The only data on tap for Tuesday are the third-quarter current-account deficit.

Read: Monday was an ugly one for the stock market headed to Christmas. Here’s what history says about returns on the following Tuesday.

Among other assets, oil prices


gave up much of gains from Asia, and were trading flat.

Which companies are in focus?