The U.S. economy is struggling to cope with numerous challenges caused by the coronavirus pandemic. Also, more than 30 million Americans in different parts of the country have applied for unemployment. Moreover, many small businesses requested forgivable loans to stay alive. This is not the end of the story, as the U.S. gross domestic product (GDP) could decline at an annualized rate of 40% in the second quarter. However, the U.S. stock market not only was able to withstand all of the problems mentioned above but saw gains.
In April, the S&P 500 added 13%, and it was the best month for the U.S. in decades more precisely since 1987.
It is worth mentioning that, as of May 1 the U.S. stocks gained 30% since March 23. Moreover, at the beginning of May, the S&P 500 at 21.7 projected earnings. It was the highest level since 2002.
The U.S. stock market benefited from the response of Washington, as U.S. authorities are working hard to prevent the financial crisis. The U.S. plans to spend a lot of money to support the economy.
Moreover, the Federal Reserve is ready to do whatever it takes to avoid a financial crisis. The Fed is buying trillions of dollars of bonds and is providing loans to businesses.
Coronavirus pandemic and the U.S. stock market
The coronavirus pandemic continues to affect the stock market. States started to reopen their economies. However, it won’t be easy to solve all the issues.
According to the nation’s top infectious expert Dr. Anthony Fauci, the second wave is inevitable. He said the United States faces a second wave of coronavirus infections in the fall.
Moreover, it is not only the S&P 500 that saw gains in April. The Nasdaq Composite reached the best result since June 2000. The U.S. stocks strengthened their positions despite all the problems connected with the economy.