By Medha Singh and Anisha Sircar
(Reuters) - Wall Street's main indexes were set for a subdued opening on Wednesday, as some caution kicked in amid thin trading volumes after daily U.S. COVID-19 infections hit a record high, while shares of heavyweight Tesla (NASDAQ:TSLA) rose nearly 1%.
The electric-car maker's CEO Elon Musk exercised all of his options expiring next year, signaling an end to his stock sales. Its shares are up 54% for the year after a 743% surge in 2020.
Some early studies pointed to a reduced risk of hospitalization for the Omicron variant, compared with the Delta strain — an observation that has helped investors look past the travel disruptions brought about by the pandemic and powered the S&P 500 to record highs this week.
U.S carriers Delta Air Lines (NYSE:DAL) and Alaska Air Group canceled hundreds of flights again on Tuesday as daily tally of infections in the United States surged.
"The market thinks that Omicron is going to hit just a few sectors of the whole economy, and most stocks will be good for that," said Luiz Pacheco, wealth advisor at Brainvest Wealth Management based in Miami.
At 8:22 a.m. ET, Dow e-minis were up 4 points, or 0.01%, S&P 500 e-minis were up 1.75 points, or 0.04%, and Nasdaq 100 e-minis were up 14.25 points, or 0.09%.
Typically, the final five trading days of the year and the first two of the subsequent year are seasonally strong for U.S. stocks.
The S&P 500 dipped on Tuesday in the lowest trading volume session of 2021, snapping a four-day winning streak.
However, market participants warned against reading too much into daily moves as the holiday season tends to record some of the lowest trading volume turnovers that cause exaggerated price action.
As 2021 draws to a close, the main U.S. stock indexes are on pace for their third straight year of stunning annual returns, boosted by historic fiscal and monetary stimulus. The S&P 500 is looking at its strongest three-year performance since 1999.
The focus next year will shift to the U.S. Federal Reserve's path of interest rate hikes amid a surge in prices caused by supply chain bottlenecks and a strong economic rebound.
Among other stocks, Rivian Automotive dropped 1.8% after company announced it would delay deliveries of its electric pickup truck and sports utility vehicle with big battery packs to 2023.