Stock markets around the world tumbled on Friday after scientists in South Africa identified a new, fast-spreading variant of the coronavirus, with the Dow Jones Industrial Average recording its biggest single-day drop of the year.
At one point, the Dow fell more than 1,000 points before recovering slightly to close down 905 points, or about 2.5%, for the session. Oil prices dropped more than 10%, their steepest one-day decline since early in the pandemic.
Virologists are rushing to learn more about the variant of the virus that causes COVID-19 that was first identified in Botswana, and which is rapidly outcompeting other versions of the virus in the region of South Africa that includes Johannesburg.
The United States said it will restrict travelers from South Africa and seven other countries starting Monday. It joined at least 10 other countries restricting travel from the region, including Belgium, Britain, France, Germany, Israel, Italy, Japan, Malta, the Netherlands, the Philippines and Singapore, The New York Times reported.
The variant, currently denominated B.1.1.529, reportedly could have far more mutations than those displayed by the delta variant, which became the dominant variant in most of the world over the summer.
It's not clear yet whether the mutations make this variant more infectious or whether it causes more severe illness, but researchers say the high number of mutations to the "spike proteins" — the focus of a body's immune response — may make it more able to get past the body's defenses.
Despite the spread of this variant, the number of COVID-19 cases in South Africa is still well below the delta surge earlier this year. But numbers are beginning to tick up again.
The European Commission recommended its members block travel from countries where the variant has been found, as Belgium reported a case, according to the BBC. The broadcaster said in addition to Botswana and South Africa, cases have also shown up in Hong Kong and Israel.
The World Health Organization called an emergency meeting on Friday, where it named the new variant omicron, after the 15th letter of the Greek alphabet, and designated it a "Variant of Concern."
"This news is putting the handbrake on markets," Peter Rutter, the head of equities at Royal London Asset Management, told Reuters.
"There is a huge range of outcomes that can happen. We could have serious lockdowns or we get no lockdowns and a booming economy," Rutter said. "The very fact we don't know, is what's concerning the market."
The Nasdaq and the S&P 500 were also down more than 2% on Friday, as U.S. markets closed early for the holiday.
Even after the global selloff, U.S. stock markets remain in positive territory for the year. The Dow is up more than 15% since the beginning of 2021, while the S&P 500 and the Nasdaq are both up more than 20%.