(Bloomberg) — U.S. stock index futures fell amid thin liquidity as investors fretted over omicron and U.S. Senator Joe Manchin’s rejection of a roughly $2 trillion tax-and-spending package, which leaves Democrats with few options for reviving President Joe Biden’s agenda.
March contracts on the Nasdaq 100 slid 1.1% as of 11:51 a.m. in Tokyo, while futures dropped 0.9% for the S&P 500 and declined 0.8% for the Dow Jones Industrial Average. Demand for haven assets boosted U.S. Treasuries, pushing 10-year yields down 3 basis points to 1.37%.
“It is omicron’s spread over the festive holidays and Manchin,” said Wai Ho Leong, strategist at Modular Asset Management (Singapore) Pte. “But most of all, it is the lack of liquidity in all markets.”
On Friday, the S&P 500 extended its weekly slide in a session of heavy trading volume. With the holidays fast approaching, it could have been the last day of 2021 with enough liquidity for investors to trade in and out of large positions.
“Unless we see this flow turn around then it feels like we could be at the mercy of position squaring, rather than chasing, and longs taking some off the table ahead of the calendar year-end,” Chris Weston, head of research with Pepperstone Financial Pty Ltd., wrote in a note to clients.
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