- The S&P 500 erased its year-to-date losses late Monday as investors outweighed fears of lasting fallout from the coronavirus pandemic.
- The benchmark index plummeted as much as 34% from its mid-February peak before bottoming out on March 23rd.
- While the Nasdaq composite turned positive for the year on May 7th, the S&P 500’s rebound is spread across more industries than its tech-heavy peer.
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In the final minutes of Monday’s trading, the S&P 500 wiped out its year-to-date losses as investors continued to shift their focus from the recession to a quick economic recovery.
The benchmark US stock index sat roughly 34% below its mid-February peak on March 23rd as the global health crisis due to the coronavirus spurred the fastest-ever plunge into bearish territory.
On the same day, the Federal Reserve announced unprecedented steps to relieve pressure on markets and lenders. The central bank’s pledge to purchase corporate debt lifted sentiments and drove record-pace buying activity.
Experts have referred to the Fed’s actions as the spark for the market’s quick recovery. Before the central bank bought any corporate debt, investors rushed back into buying risky assets with the confidence that the policy would serve as a backstop for lowered prices.
The S&P 500 isn’t the first major index to backtrack its steep declines. The Nasdaq composite accomplished the same feat on May 7th after surging on growing inflows to mega-cap technology stocks. The S&P 500’s rally, however, is far broader, led by soaring energy companies alongside Royal Caribbean Cruises, Lincoln National, and Apache.