Stock losses deepen after Fed hints at faster aid pullback

In this March 23, 2021 file photo, pedestrians walk past the New York Stock Exchange in New York's Financial District. Stocks are opening lower on Wall Street after the head of a major vaccine maker expressed concern about how effective current jabs will be against the new variant of the coronavirus. The S&P 500 gave back 0.6%, the Nasdaq slipped 0.3% and the Dow Jones Industrial Average fell 0.9%. European markets were also modestly lower. (AP Photo/Mary Altaffer, File)

Stocks fell further on Wall Street Tuesday as the Federal Reserve considers hastening its plan to ease support the economy even as investors worry about the impact of a new coronavirus variant.

The S&P 500 fell 1.8% as of 11:57 a.m. Eastern. The Dow Jones Industrial Average fell 626 points, or 1.8%, to 34,503 and the Nasdaq fell 1.9%.

Crude oil prices, which depend on a strong economy, slumped 6.4%.

The weakness started after Moderna CEO Stephane Bancel told the Financial Times that he expected current vaccines would struggle with the omicron variant. Moderna, along with Pfizer and Johnson & Johnson, make vaccines against COVID-19 that have collectively helped tame the pandemic through 2021 and allowed the global economy to recover. Moderna slumped 6.8%.

The losses for stocks accelerated after Fed Chair Jerome Powell said that the Federal Reserve will consider acting more quickly to dial back its support for the economy as inflationary pressures build. He also acknowledged that higher inflation will likely persist well into next year.

The Fed is currently reducing its monthly bond purchases, which are intended to lower longer-term borrowing costs, at a pace that would end those purchases in June. Speeding up that process could put the central bank on a path to begin raising its key short-term rate as early as the first half of next year.

The Fed is starting to ease its support for the economy and markets just as the recovery is once again being threatened by a variant of the virus that appears to spread more easily, though much is still unknown about just how much more contagious or dangerous it could be. The economy and markets were hurt by a summer surge of cases from the delta variant, though the impact on the overall recovery wasn't very big.

Markets in Europe and Asia also fell. Many countries have put up barriers to travel in an effort to stem the spread of the omicron variant, which could also hurt global business. The variant is also raising concerns that problems with global supply chains could be made worse if factories and ports shut down.

Investors are also monitoring the latest round of economic data. The Conference Board reported that consumer confidence fell to a nine-month low in November.

The big economic report this week will be Friday's U.S. jobs report from the Labor Department. Wall Street will also get an update Friday on the health of the services sector, which represents the bulk of the economy.