Market reactions to COVID-19: Stocks end the week in decline
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
Millions of Americans are unemployed, but businesses say they are having trouble hiring. Why?
This economic crisis is unusual compared to traditional recessions, according to Daniel Zhao, senior economist with Glassdoor. “Many workers are still sitting out of the labor force because of health concerns or child care needs, and that makes it tough to find workers regardless of what you’re doing with wages or benefits,” Zhao said. “An extra dollar an hour isn’t going to make a cashier with preexisting conditions feel that it’s safe to return to work.” This can be seen in the restaurant industry: Some workers have quit or are reluctant to apply because of COVID-19 concerns, low pay, meager benefits and the stress that comes with a fast-paced, demanding job. Restaurants have been willing to offer signing bonuses and temporary wage increases. One McDonald’s is even paying people $50 just to interview.
Could waiving patents increase the global supply of COVID-19 vaccines?
India and South Africa have introduced a proposal to temporarily suspend patents on COVID-19 vaccines. Backers of the plan say it would increase the supply of vaccines around the world by allowing more countries to produce them. Skeptics say it’s not that simple. There’s now enough supply in the U.S that any adult who wants a shot should be able to get one soon. That reality is years away for most other countries. More than 100 countries have backed the proposal to temporarily waive COVID-19 vaccine patents. The U.S isn’t one of them, but the White House has said it’s considering the idea.
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.
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