Equities tumbled around the world and Treasuries soared, with 10-year yields shedding 12 basis points. The market action looked a lot like a day in early 2020 when the pandemic was first spreading — stay-at-home stocks and vaccine makers rallied, while airlines and crude oil were crushed. 

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“This is a big shock for people waking up seeing the news and levels,” said Carl Dooley, head of EMEA trading at Cowen Inc. “Uncertainty and fear will remain high and maybe we aren’t going back to new highs straight away. But buying panic has been a good strategy, and based on today’s moves this is the biggest panic session of the year.”

There are still plenty of unknowns about the variant, first identified in South Africa and called B.1.1.529, but the speed at which officials have moved to ban travelers from hot spots took investors by surprise. Until today, the market narrative was all about inflation, interest-rate hikes and the end of central bank stimulus. Now, the pandemic is firmly in focus. 

Here’s how markets look on Friday: 

Reopening Trade Reversal

Anything to do with travel took the biggest hit. Cruise operators, plane makers and holiday booking sites accounted for the biggest losses in the S&P 500. A Barclays basket of European “vaccine beneficiaries” — which includes airlines, hotels and landlords — erased all gains for the year. 

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