COVID-19

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

Janet Nguyen May 1, 2020
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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

When does the expanded COVID-19 unemployment insurance run out?

The CARES Act, passed by Congress and signed by President Donald Trump in March, authorized extra unemployment payments, increasing the amount of money, and broadening who qualifies. The increased unemployment benefits have an expiration date — an extra $600 per week the act authorized ends on July 31.

Which states are reopening?

Many states have started to relax the restrictions put in place in order to slow the spread of COVID-19. Although social-distancing measures still hold virtually everywhere in the country, more than half of states have started to phase out stay-at-home orders and phase in business reopenings. Others, like New York, are on slower timelines.

Is it worth applying for a job right now?

It never hurts to look, but as unemployment reaches levels last seen during the Great Depression and most available jobs are in places that carry risks like the supermarket or warehouses, it isn’t a bad idea to sit tight either, if you can.

You can find answers to more questions here.

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