By Shreyashi Sanyal and Anisha Sircar
(Reuters) -U.S. stock indexes were set for a weak opening on Monday, dragged by concerns about the impact of tighter COVID-19 curbs on the global economy, and a potentially devastating setback to President Joe Biden's investment bill.
Surging global infections of the Omicron coronavirus variant has sparked worries in financial markets, as many European nations and Britain weigh the possibility of restrictions during Christmas.
Travel stocks fell the most in premarket trading. United Airlines dropped 3.3% to lead declines among major U.S. carriers. Royal Caribbean Group slipped 3.4% after the cruise operator said 48 people on its Symphony of the Seas cruise ship tested positive for COVID-19.
"Typically what happens in Europe is a bit of a preview for what we see in the United States. So, if we see a lot more infections in the U.S., it could stress hospitals, make people less reluctant to get out, spend, and partake in the economy. That's definitely a cause of concern," said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance.
Mega-cap growth stocks extended their slide from the previous session, with Tesla (NASDAQ:TSLA) Inc, Apple Inc (NASDAQ:AAPL), Meta Platforms and Microsoft Corp (NASDAQ:MSFT) down between 1.7% and 2%.
Denting the market's sentiment further, U.S. Senator Joe Manchin said on Sunday that he would not support President Joe Biden's $1.75 trillion domestic investment bill.
Goldman Sachs (NYSE:GS) trimmed its quarterly U.S. GDP forecasts for 2022, in response to Manchin's comments.
The developments come after the Federal Reserve's decision last week to end its pandemic-era stimulus faster, with the central bank signaling at least three quarter-percentage-point interest rate hikes by the end of 2022.
"You have to believe that if the stimulus does not go through because they can't get Senator Manchin's support, and Omicron wreaks some havoc with the economy, then clearly the Fed is going to have to slow down their plans to raise rates," Zaccarelli said.
At 8:17 a.m. ET, Dow e-minis were down 444 points, or 1.26%, S&P 500 e-minis were down 62 points, or 1.34%, and Nasdaq 100 e-minis were down 241.75 points, or 1.53%.
Biogen Inc (NASDAQ:BIIB) rose 2.3% after the drugmaker said it would slash the price of its Alzheimer's disease drug by about 50%.
Energy and industrial bellwethers also declined, with Chevron Corp (NYSE:CVX), 3M (NYSE:MMM) Co and Caterpillar Inc (NYSE:CAT) falling over 2% each.