The coronavirus pandemic has had unnerving effects as it has generated both a public health crisis and economic recession. Despite these negative effects, however, it appeared as though the stock market would remain resilient in the face of the economic downturn. However, the market took a nosedive Thursday September 3rd. This downturn comes after one of the best august performances since the 1980s and marks itself as one of the worst days for Wall Street since June.
The downturn in the stock market was made clear by drops in key defining economic metrics. “The Dow Jones Industrial Average plunged by 1,000 points at one point, the blue-chip index ended the day down by 810 points. The S&P 500 index closed with a decline of 3.5% and the Nasdaq Composite plunged by 4.96%” (NBC News). The downturn in the market across nearly every measurement factor reveals just how bad the day was for Wall Street.
The tech industry has been a major driving factor behind stock market’s success, especially in the wake of the novel coronavirus. The pullback in the market stems from investors cashing in on their stocks, which were highly valued.
Apple experienced its worst day since March with a 7% drop in shares. Amazon Prime, Alphabet, Microsoft, and Salesforce also experienced declines at around a 5% drop. These industries were experiencing a boom, but that can only last for so long.
The chief investment strategist at QMA, Ed Keon, told CNBC “So far, what I’ve seen is a perfectly natural, healthy pullback in a bull market. Things were just getting frothy in general. The market’s gone straight up in the most powerful rally I can remember in my career. At the end of the day, does the sell-off get really bad? Probably not.”
While it initially appeared as though the stock market would remain strong amidst an otherwise downturned economy, there is now some concern arising regarding the vitality of the stock market. While it is unlikely that Wall Street will see a significant plunge leading to an event reminiscent of the Great Crash of 1929, it is important that individuals who are investing in the stock market proceed with caution.
Another fortunate factor to consider is that the economy will likely be rebounding soon as the development of the coronavirus vaccine is coming along successfully. Once the vaccine can be distributed, it is likely that the economy will make a full recovery.