So much for that correction!
After a desolate week, the United States saw its major indices rally on Monday, pushing the value of domestic and domestically listed securities higher. The gains came despite a rising number of infections in the country of the novel coronavirus, now known as COVID-19.
Last week, rising concern about an international slowdown caused by the infection led to sharp declines in the value of equities both at home and abroad. News continued to spill over the weekend, pushing up the confirmed global caseload and rolling human toll.
Update: It’s worth keeping in mind the fate of one of tech’s biggest success stories during all of this, namely Robinhood, the free stock trading app. Instead of this being a day in which is crushed its growth expectations, its service has struggled to stay online today. For a company worth so many billions, it’s an embarrassing bout of downtime. Especially amongst the more active traders of the Internet. (More on Robinhood’s valuation and historical growth here.)
However, come the start of the week, investors in American stocks had traded their furs for horns and were ready to buy. The results are historic in scale, a fact tempered by their coming instantly after historic declines. In today’s trading:
- The Dow Jones Industrial Average rose 1,293 points, or a little over 5%
- The S&P 500, a broader index, rose 136 points, or around 4.6%
- The tech-heavy Nasdaq rose nearly 385 points, or 4.5%
Individual companies put on a show. Twitter closed up nearly 8% on the general updraft, and news broke that activist investors were targeting its leadership, for example.
Not all companies, however, enjoyed the day in equal measure. In perhaps a surprise, the Bessemer-sourced cloud index of SaaS shops rose just 1.5% today, regenerating far less of its recently shed tissue in the day’s rally. If this trend continues, we may be able to infer an optimism reset among the company category, a former high-flyer that attracted sky-high prices as investors coveted both its constituent recurring revenue and regular top-line expansion.
Even crypto had a good day, with the various smaller coins following bitcoin higher by around 4%.
The Nasdaq is still 9% off its 52-week highs, which are also its all-time highs. There is more recovery to do if the market wills. But who knows what tomorrow will bring. All we do know is that volatility is back, along with a glimmer of hope.