COVID-19

Market reactions to COVID-19: Stocks end the week in decline

Janet Nguyen May 1, 2020
A view of Amazon workers at Amazon's Staten Island warehouse holding a strike in March, calling for the facility be shut down and cleaned after one staffer tested positive for the coronavirus. Employees are also taking part in a nationwide strike this Friday, in protest of better working conditions. ANGELA WEISS/AFP via Getty Images
COVID-19

Market reactions to COVID-19: Stocks end the week in decline

Janet Nguyen May 1, 2020
A view of Amazon workers at Amazon's Staten Island warehouse holding a strike in March, calling for the facility be shut down and cleaned after one staffer tested positive for the coronavirus. Employees are also taking part in a nationwide strike this Friday, in protest of better working conditions. ANGELA WEISS/AFP via Getty Images

This post was updated May 1 at 8:02 p.m. Eastern time.

The major stock indexes declined on Friday after major tech companies reported how they’ve been affected by the COVID-19 pandemic. 

The Dow Jones Industrial Average declined by more than 622 points, the S&P 500 by more than 81 points and the Nasdaq composite index by more than 284 points. 

Apple failed to provide financial guidance to investors for the first time since 2003. “As COVID-19 started impacting China, iPhone supply was temporarily affected, as well as demand for our products within China. This caused us to withdraw our revenue guidance in February,” Apple CEO Tim Cook explained during a conference call on Thursday. 

Amazon also revealed how the pandemic has been affecting the company. While the tech giant’s revenue grew 26% during the first three months of the year, CEO Jeff Bezos said the company will spend the entirety of its $4 billion profit on COVID-related expenses between April and June. 

“If you’re a shareowner in Amazon, you may want to take a seat, because we’re not thinking small,” Bezos said

Although some of this would go toward paying for personal protective equipment for Amazon’s warehouse workforce, Amazon shares declined more than 7% after the news.

The market has been seesawing this week amid the release of earnings reports, unemployment data and consumer confidence numbers, along with news from the Federal Reserve and developments surrounding a drug that could treat COVID-19. 

Stocks rose on Wednesday after a study on an experimental drug from Gilead Sciences showed that it reduced the time it takes patients to recover by 31%. The Federal Reserve also announced that it plans to keep its interest rate target between 0% and 0.25%, a range the central bank set in March. “We can do what we can do, and we will do it to the absolute limit of those powers,” Fed Chair Jerome Powell said. 

There are now more than 3.1 million confirmed cases of COVID-19 worldwide and more than 224,300 people have died, according to the World Health Organization. In the United States and its territories, the number of confirmed cases has exceeded 1.1 million, while the death toll has risen to more than 64,800.

Here’s a look at how the major stock indexes have been reacting to the news since the beginning of the year.

COVID-19 Economy FAQs

Can businesses deny you entry if you don’t have a vaccine passport?

As more Americans get vaccinated against COVID-19 and the economy begins reopening, some businesses are requiring proof of vaccination to enter their premises. The concept of a vaccine passport has raised ethical questions about data privacy and potential discrimination against the unvaccinated. However, legal experts say businesses have the right to deny entrance to those who can’t show proof.

Give me a snapshot of the labor market in the U.S.

U.S. job openings in February increased more than expected, according to the Labor Department. Also, the economy added over 900,000 jobs in March. For all of the good jobs news recently, there are still nearly 10 million people who are out of work, and more than 4 million of them have been unemployed for six months or longer. “So we still have a very long way to go until we get a full recovery,” said Elise Gould with the Economic Policy Institute. She said the industries that have the furthest to go are the ones you’d expect: “leisure and hospitality, accommodations, food services, restaurants” and the public sector, especially in education.

What do I need to know about tax season this year?

Glad you asked! We have a whole separate FAQ section on that. Some quick hits: The deadline has been extended from April 15 to May 17 for individuals. Also, millions of people received unemployment benefits in 2020 — up to $10,200 of which will now be tax-free for those with an adjusted gross income of less than $150,000. And, for those who filed before the American Rescue Plan passed, simply put, you do not need to file an amended return at the moment. Find answers to the rest of your questions here.

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