Analysts cited comments from Moderna Chief Executive Stephane Bancel as a source of worry. Bancel told the Financial Times that existing Covid-19 vaccines would have trouble countering the Omicron variant.
On Monday, Federal Reserve Chair Jerome Powell warned that the variant could slow the recovery of the US economy and labor market and also heighten uncertainty regarding inflation.
Powell is due to testify later Tuesday in Congress, along with Treasury Secretary Janet Yellen.
About 15 minutes into trading, the Dow Jones Industrial Average was down 0.6 percent at 34,899.50.
The broad-based S&P 500 shed 0.6 percent to 4,627.43, while the tech-rich Nasdaq Composite Index declined 0.3 percent to 15,737.17.
Stocks have been volatile following news of the latest variant, plunging on Friday but partially recovering those losses on Monday as investors bet vaccines and emerging therapeutics would mitigate the hit from Omicron.
Markets are due to receive an update on shoppers' sentiment later Tuesday when the Conference Board releases its consumer confidence data for November and the National Retail Federation reports on holiday sales.
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