Dow futures plunge nearly 700 points amid fears of new Covid variant found in South Africa

Markets were closed on Thursday for Thanksgiving, so stocks are coming off of slight gains on Wednesday that staunched the week’s losses for the S&P 500 and Nasdaq Composite. Trading volume tends to be light during holiday weeks.

Treasury yields have climbed this week, putting pressure on high-growth stocks. The Nasdaq is down 1.3% for the week, while the S&P 500 is up less than 0.1% and the Dow has gained roughly 0.6%.

The final weeks of the year are typically a strong period for the market, with the so-called Santa Claus rally usually creating a happy holidays for Wall Street. The S&P 500 is up 25% year to date.

Friday also marks the unofficial start of the holiday shopping season, as investors will be looking for insight from Black Friday to determine the mood of the U.S. consumer.

Retail stocks have seen dramatic moves in both directions during this earnings season. On Wednesday, shares of Gap and Nordstrom tanked more than 20%, but Kohl’s jumped more than 10% a week ago after reporting strong sales growth.

Retail executives spoke during the quarter about how they are managing supply chain issues and inflation. It also remains to be seen if discussion around supply chain issues caused consumers to start their holiday shopping early, potentially denting fourth-quarter sales.

“I would not be surprised if that was a dynamic around the holiday season,” said Sarah Henry, a portfolio manager at Logan Capital Management. She added that her firm was looking for companies with long-term strategic advantages than trying to bet on the best holiday sales results.

Wednesday also saw several strong economic reports, with personal incomes and consumer spending for October coming in higher than expected and initial jobless claims hitting their lowest level since 1969. However, Core PCE, the Fed’s preferred inflation gauge, remained elevated at 4.1%.

There are no major economic releases scheduled for Friday. The stock market will close at 1 p.m. ET on Friday due to the holiday weekend.