The coronavirus pandemic is driving the performance of the US stock market. The number of infected cases in the United States has soared in recent weeks. Federal and state governments are hard at work on getting this under control. As a result, market experts expect the increased levels of volatility to continue in the financial and equity markets in the US. While the past week saw the dismal jobs report, the coming weeks are expected to see news of discouraging first-quarter earnings. The market could end up testing recent bottoms. However, the week appeared to have a great start.
As the week began, there were indications of the fatality rate from coronavirus gradually plateauing in Europe and China. The Dow Jones Industrial Average (DJIA) rose 1,100 points in just the first trading hour on Monday, though there was also the warning by the US Surgeon General that virus deaths in the US could equal the Pearl Harbor disaster in terms of lives lost this week.
Overall the Dow Jones rose to 1,627 points, which was its third greatest points advance. Another factor helping the markets was oil, whose prices staged a comeback following indications of Saudi Arabia and Russia heading to a consensus on output. JP Morgan Chase ($JPM) and American Express ($AXP) led the way among the blue-chip stocks. The S&P 500 closed at 2.663.38, while the Nasdaq ended the day at 7,913.24. The Dow closed at 22,679.99.
The growth trend looked set to continue on Tuesday. It opened to the upside in the morning, and the Dow Jones surged by around 900 points, soon followed by the other indexes. After some back and forth movement later in the day, the Dow seemed to be heading to its greatest close in three weeks. Grabbing the headlines were blue chips American Express ($AXP), Caterpillar ($CAT), and Dow Inc ($DOW).
The ending, though, was mixed as new selling was witnessed in the final minutes with the Dow and Nasdaq both falling by 26 points, while the S&P 500 was lower by 4 points. Dow closed at 22,653.86, while the S&P 500 and Nasdaq closed at 2,659.41 and 7,887.26 respectively.
The S&P soared 91 points and the Nasdaq rocketed by 204 points on Wednesday. Bargain hunters and traders managed to give the Dow Jones a 780-point push. Sectors that led the charge were utilities, energy, basic materials and real estate. Hopes continued for an agreement between Russia and OPEC for limiting production.
The Dow closed at 23,433.57, the S&P 500 ended the day at 2,749.98 and the Nasdaq closed at 8.090.90.
On Thursday, stocks began somewhere in the middle of the range. This was despite the severe bear market in February and March. This was a week shortened by the Good Friday holiday, and there was still no news of the Covid-19 pandemic being contained. First quarter earnings are also expected to be gloomy, so the week to come could have some downbeat trends in store.
The Nasdaq closed at 8,153.58 while the S&P 500 and Dow closed at 2,789.82 and 23,719.37 respectively.
SynopsisIn the weeks to come, the financial stress looks set to multiply with unemployment levels rising. The Federal Reserve has a tough task on its hands as the economy needs liquidity. Investors are expecting a bumpy ride.