Tokyo saw a nearly 2% increase, while other benchmarks in Asia were also higher.
The omicron coronavirus has caused much of the concern about the outlook. The number of cases has risen in Europe, and the U.S. federal health officials announced that it was responsible for 73% new infections last week. This is almost six times more than in seven days.
Coronavirus cases have been on the rise in Asia. South Korea and Australia are two examples. This is because governments have tightened their precautions to stop or curb these outbreaks.
Tokyo's Nikkei225 index climbed 2% to 28,496.83, while the Hang Seng in Hong Kong grew 0.3% to 22,798.23. The Kospi rose 0.3% to 2,972.79 in Seoul. Meanwhile, the Shanghai Composite index climbed 0.2% to 3,601.53. The S&P/ASX 200 rose 0.4% to 7,323.90 in Sydney.
On Monday, shares fell all over the globe. After the U.S. crude oil price fell 3.7%, stocks of oil producers led the decline. This was due to concerns that the new coronanvirus variant could cause factories, planes and drivers not to use as much fuel.
Oil prices rose early Tuesday with U.S. crude rising 81c to $69.42 per barrel through electronic trading on New York Mercantile Exchange. Brent crude rose to $72.21 per barrel, which is the international standard for pricing.
Omicron is the most fearsome force on the markets, but it's far from the only one. The proposed U.S. spending plan of $2 trillion was hit hard by an influential senator who said that he couldn't support it. Amid rising inflation, markets are still processing last week's dramatic move by the Federal Reserve of removing more aid to the economy.
All of them combined to push the benchmark S&P 500 1.1% lower at 4,568.02. The Dow Jones Industrial Average declined 1.2% to 34,932.16. The Nasdaq composite dropped 1.2% to 14,980.94.
Stocks of smaller companies fared less well than the rest. Russell 2000 index dropped 1.6% to 2,139.87.
Occidental Petroleum lost 3.8%, adding to a long list losing oil stocks. The omicron concerns also affected producers of raw materials, technology companies, and financial stocks. Nucor Steel lost 5.8%, Microsoft fell 1.2%, and Synchrony Financial (which offers store-brand credit card cards and other financial products) dropped 5.2%.
On Sunday, the Dutch government initiated a nationwide lockdown. A U.K. official said Monday that he couldn't guarantee no new restrictions would be issued this week. Monday's closing of the Natural History Museum, London's most popular attraction, was due to "front-of house staff shortages."
The U.S. President Joe Biden will announce new steps on Tuesday, while also announcing a stark warning about what winter will look like for Americans who choose not to get vaccinated, the White House press secretary stated over the weekend.
The omicron variant could also push inflation higher. If it causes closures of ports, factories, and other critical points in the long global supply chain leading to customers, it could lead to even more ensnarled operations.
These problems drove November's consumer price inflation to 6.8%, which is the highest in almost four decades.
Some economists believe that omicron could actually have the opposite effect. If the variant leads consumers to stay home or locks them down, then economic activity may slow. This would also reduce the surge in demand that has overtaken supply chains and driven up consumer price.
Worst-case scenario: The economy would slow down without any relief from the already-built-in inflation.
The U.S. dollar rose from 113.61 to 113.65 yen in currency trading. From $1.1283, the euro strengthened to $1.1286.
