A year ago, the US stock market reached a lower level, with the S&P 500 hitting its target after a 34% dip in just 23 trading days.
At the time, few could have imagined the market’s recovery, including 34 index records from last year’s low. Despite a global pandemic that has killed nearly 550,000 people in the United States, eliminated millions of jobs and restricted economic activity, stock market indices have reached new highs.
Behind the amazing rally are a number of factors, including, initially, the Federal Reserve’s rapid emergency measures to support the financial markets and the economy. They helped lower US stocks from the 2020 low and began a series of managements supported by growth and technology stocks. As investors piled up on the stock market last year, they amassed shares of companies that would benefit from the pandemic. Unlike sectors such as energy and retail, which have suddenly faced uncertainty, technology stocks have been hailed by some analysts as having great growth potential.
Recently, however, the rally stopped, briefly sending Nasdaq Composite technology into a correction – a 10% drop from a recent high. Since the recent recording of the index on 12 February, growth and technological stocks have struggled to a large extent. Instead, other sectors have grown, including energy and finance.
The following charts show how the market has changed since February 12th.