The stock market is currently hovering near record highs, a stark contrast to the depths it plumbed four years ago as the COVID-19 pandemic threw economies into disarray. It was a harrowing time; a gut-wrenching experience that had many wondering when – or if – the market would ever recover.
A Tremendous Fall: The market had soared for over a decade, riding high from the lows of the Great Recession in 2009. It seemed unstoppable, a juggernaut gaining momentum until, suddenly, it came to a screeching halt in early 2020. The outbreak of the pandemic acted as a wrecking ball, shattering the world’s complacency and casting a shadow of uncertainty over market outlooks.
February 2020 marked the beginning of a freefall for stock markets worldwide. Investment portfolios hemorrhaged value, with the trend intensifying in the ensuing weeks. On a fateful day, March 16, 2020, the S&P 500 closed at a desolate low of 2,386.13, registering a steep 12% drop – the most significant decline during the pandemic chaos. This day, dubbed “Black Monday II” in financial circles, followed closely on the heels of the first Black Monday, when the market had stumbled by about 8%.
On this calamitous day, stocks across multiple sectors bled, with even tech giant Apple, then the market darling, succumbing to a loss exceeding 12% in a single trading session.
An Astounding Rebound: Global financial powerhouses, spurred by a sense of collective responsibility, banded together to staunch the market’s hemorrhaging wounds, particularly in the U.S. With concerted efforts and unprecedented stimulus packages, the S&P 500 Index slowly but surely began its upward climb, signaling a potential escape from the recessionary pit.
The upward trajectory continued throughout 2021 but met a roadblock in 2022 as inflation reared its head, necessitating reactive measures. The Federal Reserve found itself in a tight spot, forced to raise interest rates swiftly and assertively. This move rattled consumer confidence, tightened credit availability, and placed undue strain on businesses navigating turbulent waters.
However, exceptional resilience in the face of adversity characterized the market’s behavior in 2023, heralding an era of recovery in a high-interest-rate environment. Since then, the stock market has not only bounced back but soared to new heights, defying all odds.
SPY Returns Unveiled: The SPDR S&P 500 ETF Trust SPY closed at $224.53 on March 16, 2020. A theoretical $1,000 investment at the nadir of the market crash would have secured 4.5 units of the ETF. Fast forward to today, those initial units would have burgeoned to $2,271, raking in a hefty 127% return over the tumultuous four-year period.
Source: Benzinga
Closing the week, the SPY registered a modest 0.69% drop, settling at $509.83, as per Benzinga Pro data.
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