Stocks tumbled Tuesday after Federal Reserve Chairman Jay Powell said the central bank could accelerate its bond-buying taper, even amid fears about the new Covid omicron variant.
Here's what four market experts had to say about the market's move.
Tom Lee, head of research at Fundstrat Global Advisors, says investors need to look ahead to 2022.
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"Days like today are tough because markets don't like uncertainty — omicron and then the Fed's comments are a surprise to markets. But I think investors have to think about what matters more to the economy and markets in 2022. And I think the delta and omicron [variants], these viruses really only do flesh wounds to the economy. But, the fact [is] inflation risk is cooling, and it's part of this because of these border closures. And I think even Powell, his comments are really cooling the inflation risk. ... I think if inflation is less of a problem in 2022, that's actually a tailwind for markets."
Josh Brown, CEO of Ritholtz Wealth Management, sees a big difference between individual stocks and the broader markets.
"I think what's remarkable here is ... when you look at individual stocks, how much worse stocks look versus the index. The SPX and the Nasdaq are still only about 3.5% off their highs, which, given the bloodbath that you're seeing in everything from recent IPOs to growth tech to cyclicals ... It's really remarkable how well the indices are able to hold up basically on the back of Apple and Pfizer. It's really a wild situation."
David Zervos, chief market strategist at Jefferies, lists the potential headwinds he sees.
"Those three things: a new Fed — this is not the same Fed as we had before, we're going to get a whole new cast of characters and the market has got to understand where they're coming from; an inflation situation that does seem to have much more, in my opinion, supply-side rigidities than we may have thought earlier; and liquidity are all combining for something that could be quite a bit of fireworks."
Chris Grisanti, chief equity strategist at MAI Capital Management, gives his take on Powell's comments.
"It was unfortunate today that [Powell] chose the omicron background to deliver a needed message, which is, 'Hey, inflation is chugging along, as is the economy.' But that's not necessarily a terrible thing. It means the economy is racing; it means good things. It's just that that plus omicron at the wrong moment I think is really giving the market a little concern. However, having said that, I think higher rates will mean that P/Es come down. The question, though, for the market is can earnings increase fast enough that that's okay. And boy, they're increasing fast."