Asian stock markets followed Wall Street lower on Monday amid concern about the coronavirus’s latest variant and tighter Federal Reserve policy.

Shanghai, Tokyo, Hong Kong and Sydney retreated at the start of a trading week that will be shortened by the Christmas holiday.

Wall Street fell Friday as traders took money off the table after the Fed indicated it would fight inflation by speeding up withdrawal of economic stimulus.

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The spread of the omicron variant has fueled fears that renewed curbs on business and travel might worsen supply chain disruptions and boost inflation.

“Omicron threatens to be the Grinch to rob Christmas,” Mizuho Bank’s Vishnu Varathan said in a report. “The jury is out, which squares with a market that prefers safety to nasty surprises.”

The Shanghai Composite Index fell 0.5% to 3,613.50 and the Nikkei 225 in Tokyo tumbled 1.7% to 28,055.28. The Hang Seng in Hong Kong sank 0.9% to 22,976.86.

The Kospi in Seoul retreated 1.4% to 2,975.70 and Sydney’s S&P-ASX 200 lost 0.2% to 7,288.30.

New Zealand gained while Singapore and Jakarta retreated.

The U.S. government warned Sunday of a possible surge of “breakthrough infections” due to Americans traveling for the Christmas and New Year holidays.

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Stocks briefly rallied but then fell last week after Fed officials said they were willing to speed up withdrawal of stimulus that has boosted financial markets.

Also potentially weighing on sentiment, a U.S. senator said Sunday he wouldn’t support President Joe Biden’s $2 trillion infrastructure, social spending and climate plan. Joe Manchin’s announcement possibly dooms the plan’s chances in the evenly split Senate.

On Friday, Wall Street’s benchmark S&P 500 index fell 1% to 4,620.64, turning in its third losing week out of the past four. The index is 2% below its all-time high and up 23% for the year.

The Dow Jones Industrial Average fell 1.5% to 35,365.44. The Nasdaq, dominated by tech stocks, slipped 0.1% to 15,169.68.

Fed officials indicated Wednesday it might accelerate the reduction of bond purchases that inject money into financial markets and keep interest rates low. That sets the stage for the Fed to begin to raise rates next year.

Inflation has been a growing concern throughout 2021. Higher raw materials costs and supply chain problems have been raising overall costs for businesses, which have raised prices on goods to offset the impact.

Consumers have so far absorbed those price increases, but they are facing persistent pressure from rising prices and that could eventually prompt a pullback in spending. Any pullback in spending could then crimp economic growth.

In energy markets, benchmark U.S. crude lost $1.76 to $68.96 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.52 on Friday to $70.86. Brent crude, the price basis for international oils, sank $1.69 per barrel to $71.83 in London. It lost $1.50 the previous session to $73.52 per barrel.

The dollar declined to 113.54 yen from Friday’s 113.70 yen. The euro held steady at $1.1251.