Four months after the coronavirus pandemic shut down multiple industries and the U.S. economy, the S&P 500 has recovered all of its losses.
According to The New York Times, the S&P 500 rose more than 1% Monday. Part of a large rebound fueled by hopes for a quick economic recovery, significant help the Federal Reserve, and disregard for the serious risks that businesses and consumers still face.
Airlines are among companies experiencing the biggest gains as domestic travel is beginning to pick up again. Energy companies and oil are also rising. Crude oil briefly climbed over $40 a barrel Monday.
Stocks have been on a steady climb in recent weeks as states and countries begin lifting restrictions. On Monday, New York entered its first phase of recovery, allowing construction, manufacturing, and some retail operations to reopen.
The S&P 500 enjoyed a 5% gain last week, but the market’s climb started in March after the Federal Reserve signaled a willingness to funnel unlimited amounts of liquidity into financial markets. Since that happened, stocks have risen more than 44%.
Despite the good news, no one knows for sure how long the rebound
will last. For starters, some states that reopened early have seen a significant rise in cases, including Arizona where hospitals have been told to make room for an increase in capacity.A second wave of cases across the country either later in the summer or in the fall could send everyone back in their homes and the market tumbling back down. President Trump has already said the country will not close if a second wave occurs.
Last month, Dr. Anthony Fauci, the nation’s top infectious disease expert, told the Senate the U.S. will experience needless suffering
if states began opening too soon.“The major message that I wish to convey to the Senate HLP committee tomorrow is the danger of trying to open the country prematurely,” Fauci wrote in May. “If we skip over the checkpoints in the guidelines to: ‘Open America Again,’ then we risk the danger of multiple outbreaks throughout the country. This will not only result in needless suffering and death, but would actually set us back on our quest to return to normal.”
Many states that have either started to reopen or have done so already did not hit even the modest goals the Trump administration set in its Opening Up America Again Plan
.The plan recommended states have a “downward trajectory of positive tests” or a “downward trajectory of documented cases” of coronavirus over a 2 week period. The plan adds states should be conducting robust contact tracing and “sentinel surveillance” testing of asymptomatic people in vulnerable populations, such as nursing homes.
Many states are still working to increase the number of tests given and processed per day, which is one of the reasons cases are still increasing across the country.