Advertisement

SKIP ADVERTISEMENT

Comments

The Stock Market’s Covid Pattern: Faster Recovery From Each PanicSkip to Comments
The comments section is closed. To submit a letter to the editor for publication, write to letters@nytimes.com.

The Stock Market’s Covid Pattern: Faster Recovery From Each Panic

Duration for S&P 500 to recover to peak levels

after pandemic-related declines

Percentage changes in the

S&P 500 during each period

–15

–10

–35

–30

–25

–20

–5%

0

Omicron variant

emerges

NOV.-DEC. ’21

2 WEEKS, 4 DAYS,

SO FAR

(CALENDAR DAYS)

Delta spreads

as worries grow

over inflation

SEPT.-OCT. ’21

7 WEEKS

TO RECOVERY

Deaths and

restrictions

increase amid

election cycle

SEPT.-NOV. ’20

10 WEEKS, 2 DAYS

Covid-19

throws the

world into

chaos

FEB.-AUG. ’20

25 WEEKS, 6 DAYS

Duration for S&P 500 to recover to peak levels after pandemic-related declines

Covid-19

throws

the world

into chaos

Delta spreads

as worries grow

over inflation

Omicron variant

emerges

Deaths and restrictions

increase amid election cycle

NOV.-DEC. ’21

SEPT.-OCT. ’21

SEPT.-NOV. ’20

FEB.-AUG. ’20

2 WEEKS, 4 DAYS,

SO FAR

(CALENDAR DAYS)

7 WEEKS

TO RECOVERY

10 WEEKS,

2 DAYS

25 WEEKS,

6 DAYS

0

–5%

–10

–15

–20

–25

–30

–35

Percentage changes in the S&P 500 during each period

Duration for S&P 500 to recover to peak levels after pandemic-related declines

Omicron variant

emerges

Delta spreads as worries

grow over inflation

Deaths and restrictions

increase amid election cycle

Covid-19 throws

the world into chaos

NOV.-DEC. ’21

2 WEEKS, 4 DAYS, SO FAR

(CALENDAR DAYS)

SEPT.-OCT. ’21

7 WEEKS TO RECOVERY

SEPT.-NOV. ’20

10 WEEKS, 2 DAYS

FEB.-AUG. ’20

25 WEEKS, 6 DAYS

0

–5%

–10

–15

–20

–25

–30

Percentage change in the S&P 500 during each period

–35

Stocks have swung wildly since the Omicron variant of the coronavirus emerged, once again raising concerns about the pandemic’s potential to damage the global economy.

It’s the latest round of market upheaval since the outbreak of Covid-19 roughly two years ago, with the virus repeatedly tilting Wall Street’s assumptions about whether people would shop, travel or even turn up for work. Each new phase of the pandemic has brought new requirements for testing, border closings or warnings against public gatherings.

Much is still unknown about the Omicron variant, including how much protection vaccines provide. But financial markets have taken the news in stride relative to earlier outbreaks.

That follows a pattern. Each bout of pandemic-driven volatility in the stock market since February 2020 has been shorter than the one before, and followed by a recovery to a new high. The S&P 500 through Monday had recovered nearly all its losses from its previous peak after Omicron’s existence was announced by officials on Nov. 26.

The stock market has often been a barometer for the path of the pandemic, tumbling after concerning milestones, and rising on advancements of vaccinations and new treatments. But the two haven’t always moved in lock step, and Wall Street’s performance has at times disregarded the human toll of the pandemic as it instead zeroed in on other factors that could drive corporate profits, like low interest rates and government spending.

Newly reported

Covid-19 cases

worldwide

S&P 500

Declining

Rising cases

3,000

4,000

5,000

800

0

200

thousand

400

600

Newly reported Covid-19

daily cases worldwide

S&P 500

Stock market declining

Rising cases

800

0

200

thousand

400

600

2,000

3,000

4,000

5,000

Newly reported Covid-19 daily cases worldwide

S&P 500

Rising cases

Stock market declining

2,000

3,000

4,000

5,000

800,000

0

200,000 cases

400,000

600,000

JAN.

2020

FEB.-MARCH 2020 When the outbreak reached a global scale, and millions began losing their jobs during the recession, the S&P lost more than a third of its value from its peak.

FEB.

PEAK

–33.9%

FROM

PEAK

APRIL

MAY

JUNE

JULY

AUG.

SEPT.-OCT. 2020 Case counts exploded and the death toll kept rising, fueling concerns that new restrictions might again pinch the global economy. Coupled with the uncertainty around the U.S. presidential election, the S&P neared a correction, a symbolic yet worrisome milestone on Wall Street.

–9.6%

OCT.

NOV.

DEC.

JAN.

2021

FEB.

MARCH-APRIL 2021 Even as case counts reached their highest levels ever, the stock market continued on a steady climb, bolstered by optimism behind the rollout of vaccines.

MAR.

APRIL

MAY

JUNE

JULY

AUG.

SEPT.-OCT. 2021 The persistence of the Delta variant threatened the recovery while high inflation raised questions about whether Federal Reserve officials would start to trim stimulus efforts.

SEPT.

–5.2%

OCT.

NOV.

NOV.-DEC. 2021 The emergence of the Omicron variant sent markets reeling again, just as colder weather in many parts of the world helped push cases higher.

–4.1%

JAN.

2020

FEB.

PEAK

FEB.-MARCH 2020 When the outbreak reached a global scale, and millions began losing their jobs during the recession, the S&P lost more than a third of its value from its peak.

MAR.

–33.9%

FROM

PEAK

APRIL

MAY

JUNE

JULY

AUG.

SEPT.-OCT. 2020 Case counts exploded and the death toll kept rising, fueling concerns that new restrictions might again pinch the global economy. Coupled with the uncertainty around the U.S. presidential election, the S&P neared a correction, a symbolic yet worrisome milestone on Wall Street.

SEPT.

–9.6%

OCT.

NOV.

DEC.

JAN.

2021

FEB.

MARCH-APRIL 2021 Even as case counts reached their highest levels ever, the stock market continued on a steady climb, bolstered by optimism behind the rollout of vaccines.

MAR.

APRIL

MAY

JUNE

JULY

AUG.

SEPT.-OCT. 2021 The persistence of the Delta variant threatened the recovery while high inflation raised questions about whether Federal Reserve officials would start to trim stimulus efforts.

SEPT.

–5.2%

OCT.

NOV.

NOV.-DEC. 2021 The emergence of the Omicron variant sent markets reeling again, just as colder weather in many parts of the world helped push cases higher.

–4.1%

DEC.

JAN.

JAN.

2020

2020

FEB.

FEB.

PEAK

FEB.-MARCH 2020 When the outbreak reached a global scale, and millions began losing their jobs during the recession, the S&P lost more than a third of its value from its peak.

MARCH

MARCH

–33.9%

FROM

PEAK

APRIL

APRIL

MAY

MAY

JUNE

JUNE

JULY

JULY

AUG.

AUG.

SEPT.-OCT. 2020 Case counts exploded and the death toll kept rising, fueling concerns that new restrictions might again pinch the global economy. Coupled with the uncertainty around the U.S. presidential election, the S&P neared a correction, a symbolic yet worrisome milestone on Wall Street.

SEPT.

SEPT.

–9.6%

OCT.

OCT.

NOV.

NOV.

DEC.

DEC.

JAN.

JAN.

2021

2021

FEB.

FEB.

MARCH

MARCH

MARCH-APRIL 2021 Even as case counts reached their highest levels ever, the stock market continued on a steady climb, bolstered by optimism behind the rollout of vaccines.

APRIL

APRIL

MAY

MAY

JUNE

JUNE

JULY

JULY

AUG.

AUG.

SEPT.-OCT. 2021 The persistence of the Delta variant threatened the recovery while high inflation raised questions about whether Federal Reserve officials would start to trim stimulus efforts.

SEPT.

SEPT.

–5.2%

OCT.

OCT.

NOV.

NOV.-DEC. 2021 The emergence of the Omicron variant sent markets reeling again, just as colder weather in many parts of the world helped push cases higher.

NOV.

–4.1%

DEC.

DEC.

The market’s recoveries after pandemic-induced dips were underpinned by the Federal Reserve’s measures to cut borrowing costs and keep capital pumping through the financial system. Progress on vaccines and other treatments helped mute market falls.

They also helped shift the focus to the prospects for economic recovery and growth, even as case counts kept climbing — at least until a new development, like the discovery of Omicron, served as a reminder of the uncertainty the world still faces.

In recent weeks, Wall Street’s economists have begun trimming their forecasts for economic growth, some of them citing the impact that the variant could have on the pace of reopening. Many think the main risk is that the new variant will worsen persistent disarray in global supply chains.

If it prompts tighter lockdowns, it could force factories to shutter, exacerbating shortages of everything from cars to building materials. Already, those kinds of disruptions have been a key reason that prices have risen much faster than economists had expected, and the potential for the Federal Reserve to have to act to tamp down price gains has added to the market’s recent turbulence.