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
So what’s up with “Zoom fatigue”?
It’s a real thing. The science backs it up — there’s new research from Stanford University. So why is it that the technology can be so draining? Jeremy Bailenson with Stanford’s Virtual Human Interaction Lab puts it this way: “It’s like being in an elevator where everyone in the elevator stopped and looked right at us for the entire elevator ride at close-up.” Bailenson said turning off self-view and shrinking down the video window can make interactions feel more natural and less emotionally taxing.
How are Americans spending their money these days?
Economists are predicting that pent-up demand for certain goods and services is going to burst out all over as more people get vaccinated. A lot of people had to drastically change their spending in the pandemic because they lost jobs or had their hours cut. But at the same time, most consumers “are still feeling secure or optimistic about their finances,” according to Candace Corlett, president of WSL Strategic Retail, which regularly surveys shoppers. A lot of people enjoy browsing in stores, especially after months of forced online shopping. And another area expecting a post-pandemic boost: travel.
What happened to all of the hazard pay essential workers were getting at the beginning of the pandemic?
Almost a year ago, when the pandemic began, essential workers were hailed as heroes. Back then, many companies gave hazard pay, an extra $2 or so per hour, for coming in to work. That quietly went away for most of them last summer. Without federal action, it’s mostly been up to local governments to create programs and mandates. They’ve helped compensate front-line workers, but they haven’t been perfect. “The solutions are small. They’re piecemeal,” said Molly Kinder at the Brookings Institution’s Metropolitan Policy Program. “You’re seeing these innovative pop-ups because we have failed overall to do something systematically.”
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