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NEW YORK: Oil prices slid and global stock benchmarks fell Tuesday after a warning from drugmaker Moderna that existing vaccines are unlikely to be effective against the new coronavirus variant pushed investors into safe havens such as Treasury bonds and the yen.

"There is no world, I think, where (the effectiveness) is the same level," Moderna's chief executive Stéphane Bancel told the Financial Times in an interview.

"I think it's going to be a material drop. I just don't know how much because we need to wait for the data. But all the scientists I've talked to?.?.?.are like 'this is not going to be good'," Bancel said.

Bancel had earlier said on CNBC that there should be more clarity on the efficacy of COVID-19 vaccines against Omicron in about two weeks, but that it could take months to begin shipping a reworked vaccine designed for the new variant.

"It's not good news, and it's coming from someone who should know," said Commonwealth Bank of Australia currency strategist Joe Capurso. "Markets have reacted in exactly the way you'd expect them to."

MSCI's gauge of stocks across the globe shed 0.39% following broad declines in Europe and Asia. Concerns that the new coronavirus variant would lead to more travel restrictions continued to hammer European travel and leisure stocks, wich are on pace for the biggest monthly fall since the initial COVID-19 lockdowns in March 2020.

Dow, S&P 500 slip as Omicron worries grow after vaccine warning

In the United States, the Dow Jones Industrial Average fell 237.71 points, or 0.68%, to 34,898.23, the S&P 500 lost 30.51 points, or 0.66%, to 4,624.76 and the Nasdaq Composite dropped 57.57 points, or 0.36%, to 15,725.26.

"This whipsaw price action could become a regular feature over the next couple of weeks as information on the variant trickles out and we get a much better understanding of what we're dealing with," said Craig Erlam, senior market analyst at Oanda. "For now, markets will remain very sensitive to indications that vaccines may not protect us this winter as much as we hoped."

Omicron worries sent the yield on 10-year German Bunds - regarded as one of the safest assets in the world - to its lowest in just over a week at -0.345%.

Most other benchmark 10-year yields in the euro zone fell by a similar amount, while US 10-year Treasury yields tumbled 7.5 bps to around 1.45%.

The Japanese yen - traditionally viewed as safe harbour due to its role as a funding currency - was near its highest level of the month at 112.98 yen.

Fed chairman Jerome Powell will appear before Congress later Tuesday to discuss the central bank's outlook for inflation. In prepared remarks, Powell said that "the emergence of the new Omicron variant could reduce people's willingness to work in person, which would slow progress in the labor market and intensify supply-chain disruptions."

Spot gold added 0.6% to $1,795.68 an ounce. In the commodity markets, US crude recently fell 3.75% to $67.33 per barrel and Brent was at $70.94, down 3.4% on the day.

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