Wall Street’s fear knife rose on Friday as a new, heavily mutated one COVID-19 variant Discovered in South Africa prompted some countries to reinstate travel bans, rekindling fears that a resurgent virus could wreak havoc on global economic recovery.

The Cboe Volatility Index (VIX) helps measure investor fear; it jumped up to 54% to 28.62 during Friday’s trading. Although it represents the highest level for the index since May 2021, it is still well below the values ​​at the beginning of the pandemic (in April 2020 the value reached almost 42).

It’s the largest in a day increase for the measure since January 2021, before COVID-19 vaccines were readily available to most Americans.

DOW POSITIONS LARGEST ONE-DAY DROP THIS YEAR AS A NEW COVID-19 VARIANT TRIGGERS MARKET SALE

The surge comes after health officials warned of a new variant found in South Africa that has a high number of mutations and has spread rapidly among young people.

The World Health Organization held an emergency meeting on Friday to discuss the potential risks of the new variant – now called “Omicron” – and ultimately decided to label it as a highly communicable virus “of concern.” Early evidence suggests an increased risk of reinfection.

While it was not immediately clear how effective the vaccines against the new variant were, mRNA vaccines – such as those developed by Pfizer and Moderna – can be easily updated.

The economic impact of the new tribe – spotted in Hong Kong, Belgium and Israel, as well as South Africa – was felt as early as Friday when at least 10 European nations suspended air travel from southern Africa. the 27-nation European Union also recommended an “emergency brake” for travel from southern Africa, citing the “very worrying” new variant

The US also said it would restrict travel to non-citizens of South Africa from Monday. President Biden was appointed by the White House Chief Medical Officer, Dr. Anthony Fauci, informed of the matter.

“The economic recovery has been pretty impressive and the only thing that could completely knock it off would be a more dangerous option,” said Ryan Detrick, chief market strategist at LPL Financial. “Time will tell how concerned we should be, but investors are selling in the face of potential bad news.”

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Fear of the new strain caused stocks to tumble during Friday’s trading session that ended at 1 p.m. ET due to the Thanksgiving holiday.

The Dow Jones Industrial Average ended the day down 905 points, or 2.5%, for its largest one-day point and the largest percentage decline since October 2020. The S&P meanwhile fell 2.27%, which is also its largest one-day point decline since October 2020. The tech-heavy Nasdaq Composite lost 2.23%.