Shares fell on Tuesday as investors weighed the possibility of an economic impact from the novel coronavirus variant.
The Dow Jones Industrial Average was down more than 600 points at noon ET.
In testimony before the Senate Banking CommitteeFederal Reserve Chairman Jerome Powell warned that growing concern about the coronavirus, including the new omicron variant, could make people wary about returning to in-person work. That could slow the labor market recovery and lengthen supply chain bottlenecks that have contributed to highest inflation in more than three decades.
Powell said rising inflation is likely to continue well into the coming year.
Fed policymakers will meet in about two weeks. Later, Powell said, they may have more information about the possible health effects of the omicron variant and how it responds to existing vaccines.
With price pressures mounting, the central bank has begun to return to its aggressive bond-buying program, which was launched in the early stages of the pandemic to support financial markets. But Powell hinted that the process could be sped up, so the bond purchases would end several months earlier than next summer.
Ending bond purchases early would give the Fed more flexibility to raise interest rates, if needed, to keep inflation from spiraling out of control.
