Market

The stock market hit a pandemic bottom 3 years ago. Here’s how it has performed since then.

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It has been three years since the U.S. stock market hit its COVID-19 bottom as the global economy suddenly shut down at the start of the pandemic in early 2020. 

The S&P 500
SPX,
+0.30%

has risen nearly 76% from its closing low of 2237.40 reached on March 23, 2020, while the Dow Jones Industrial Average
DJIA,
+0.23%

is up 72.3% from its low of 18591.93 hit on the same day and the Nasdaq Composite
COMP,
+1.01%

has advanced over 70%, according to Dow Jones Market Data. 

Infections caused by COVID-19 began to spread in early 2020, and panic triggered by the economic uncertainty led to a drop in the stock market that started in late February. On Feb. 24, the Dow industrial average slumped more than 1,000 points, its third-worst daily point drop in history. 

The selloff accelerated in mid-March, with the Dow entering bear-market territory on March 10, down more than 20% from the record close set in the previous month. Meanwhile, the large-cap index S&P 500 dropped nearly 34% in about a month, wiping out three years’ worth of gains for the market, according to Dow Jones Market Data. 

However, a massive amount of support from the Federal Reserve, including an emergency interest-rate cut, as well as the quick development of COVID-19 vaccines, limited a further downturn in stocks. The S&P 500 rose to an all-time high in August and reached several more all-time highs in the following months, according to Dow Jones Market Data. 

In 2021, three major indexes all closed out the year with robust gains as investors brushed off a series of market-moving events that could have crashed stocks. The strong performance came in a year defined by, among other things, the January 6 attack on the U.S. Capitol, supply-chain disruptions, high inflation, labor-market shortages and the omicron and delta COVID variants.

But as the calendar flipped to 2022, U.S. stocks started to tumble after the Federal Reserve and central banks around the globe began raising interest rates aggressively to fight surging inflation, stoking fears of a global recession.

Russia’s invasion of Ukraine in February 2022 and China’s zero-COVID policies, in place until the country suddenly scrapped the stringent measures in December 2022, also contributed to market volatility. The three stock indexes all suffered their worst year since 2008.

Among 11 S&P 500 sectors, energy
SP500.10,
-1.36%

has been the best-performing sector over the past three years. The sector was boosted by a spike in crude-oil and natural-gas prices in the aftermath of Russia’s invasion of Ukraine.


DOW JONES MARKET DATA

Among individual stocks, First Republic Bank has been the worst performer in the S&P 500 since March 2020, with the financial institution coming under stress following the collapse of two U.S. regional banks.


DOW JONES MARKET DATA


DOW JONES MARKET DATA

Also see: The Fed pivot is near, and yield curve inversion has likely peaked. That’s usually bad news for stocks, this Fidelity strategist says.

U.S. stocks rallied on Thursday after closing sharply lower in the previous session. The Federal Reserve raised interest rates by another 25 basis points on Wednesday while noting that policy makers weren’t penciling in rate cuts this year, despite recent stress in the banking industry. Stocks also reacted after Treasury Secretary Janet Yellen said she wasn’t considering steps to guarantee all bank deposits.

The S&P 500 gained 0.3%, while the Dow advanced 0.2% and the Nasdaq Composite was up 1%.

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Jake

Jacob Keiter is a husband, a writer, a journalist, a musician, and a business owner. His journey to becoming a writer was one that was paved with challenges, but ultimately led him to find his true calling. Jacob's early years were marked by a strong desire for creative expression. He was always drawn to music, and in his youth, he played in several bands, chasing the elusive promise of fame and success. However, despite his best efforts, Jacob struggled to find the recognition he craved. It wasn't until he hit a low point in his life that Jacob discovered his love for writing. He turned to writing as a form of therapy during a particularly difficult time, and found that it not only helped him to cope with his struggles, but also allowed him to express himself in a way that he had never been able to before. Jacob's writing skills quickly caught the attention of others, and he soon found himself working as a journalist for The Sun out of Hummelstown. From there, he went on to contribute to a variety of publications, including the American Bee Journal and Referee Magazine. Jacob's writing style is reflective of traditional journalism, but he also infuses his work with a unique voice that sets him apart from others in his field. Despite his success as a writer, Jacob also owns another business, JJ Auto & Home, which specializes in cleaning. Jacob's commitment to excellence is evident in all of his endeavors, whether it be in his writing or in his business ventures. Today, Jacob is the author of two books and continues to inspire others through his writing. His journey to becoming a writer serves as a reminder that sometimes our darkest moments can lead us to our greatest achievements.

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