Investor sentiment sagged as concern about President Joe Biden’s economic agenda and the omicron coronavirus surge dragged down stocks. Traders said lower volume ahead of the holidays exacerbated market moves.

The S&P 500 had its biggest three-day drop since September, led by losses in financial and material shares. Bonds fell. The dollar was little changed.

“There’s kind of two dynamics going on. Probably the most important one is the imminent reduction in liquidity,” said Jay Hatfield, chief executive officer at Infrastructure Capital Management. “On top of that, you have the omicron concern.”

Goldman Sachs Group Inc. economists cut their U.S. growth forecasts after Democratic Senator Joe Manchin blindsided the White House by rejecting Biden’s roughly $2 trillion tax-and-spending package. Meanwhile, Europe’s biggest nations weighed more Covid-19 restrictions.

What to watch this week:

• Reserve Bank of Australia releases minutes of its December rate meeting. Tuesday
• EIA oil inventory report Wednesday
• U.S. consumer income, new home sales, U.S. durable goods, University of Michigan consumer sentiment, initial jobless claims. Thursday
• Friday: U.S. markets are closed. European markets close earlier

Some of the main moves in markets:

Stocks

• The S&P 500 fell 1.1% as of 4 p.m. New York time
• The Nasdaq 100 fell 1.1%
• The Dow Jones Industrial Average fell 1.2%
• The MSCI World index fell 1.4%

Currencies

• The Bloomberg Dollar Spot Index was little changed
• The euro rose 0.3% to $1.1278
• The British pound fell 0.3% to $1.3209
• The Japanese yen was little changed at 113.67 per dollar