U.S. stocks tumbled on Friday morning after South Africa sounded the alarm over a new, fast-spreading COVID-19 variant, triggering fresh fears that a resurgent coronavirus could scuttle the global economy's recovery from the pandemic.
The Dow Jones Industrial Average fell 900 points, or nearly 2.5%, while the S&P 500 dropped 1.26%. The Nasdaq Composite fell a little under 1% at the beginning of the shortened trading session on Friday (U.S. markets close at 1 p.m. ET due to the Thanksgiving holiday). Volume is expected to be light due to the holiday, which could create more volatility.
Oil also cratered, falling about 7% to about $72.30 per barrel level. Crude also saw additional pressure following reports that OPEC is considering pausing an output increase after President Biden and other energy-consuming countries tapped their national petroleum reserves.
The drop comes after South African scientists warned of a new variant found in the country that has a high number of mutations and has spread quickly among young people. The World Health Organization is due to meet Friday to discuss whether the strain is a concern and to determine whether to give it a name from the Greek alphabet. The new strain has already prompted some European nations to restrict travel from South Africa and other parts of the continent.