Stock Market Thrown into Chaos During Past Year Before Rebounding



Despite the chaos caused by COVID-19 and the Reddit Gamestop stock situation, the stock market rebounds from its crash a year later.

In the past year, the values of countless stocks have both skyrocketed and plummeted due to the chaos caused by COVID-19. The stock market, simplified, is a collection of shares in different companies that can be bought and sold. The prices of these stocks reflect the performances of the companies, which have been largely unstable during the pandemic as a whole. This instability explains the rollercoaster of changes in the values of various stocks within the last year, with events from the stock market crash to the Reddit Gamestop stock situation. 

However, despite all of these events that have shaken the stock market, it still holds a special place in the hearts of many investors.

“I remember hearing the morning bell ringing and seeing the traders in their colored jackets going crazy. It was exciting to me as a 21-year-old. I remember arguing with people about which businesses would thrive,” said avid investor Brian Feeney and longtime Longfellow substitute teacher. Feeney worked in the Philadelphia Stock Exchange for some time. 

Many different individuals across various fields have taken the time to invest in the stock market in the hope of making profits through additional income. So naturally, due to the immense quantity of money invested, when the stock market crashed from February 20th to April 7th of 2020, many investors lost much of the value in their stocks. The fact that the well-being of companies directly correlates to the values of their stocks explains the drop in many stock values. 

“You can put money into owning tiny fractions of companies, and when companies do well (or people think they will do well), the amount of the company you own will increase in value. When the company does poorly (or people think they will do poorly), that same ownership stake will decrease in value,” explained Ted Tynan, Longfellow school psychologist and investor.  

The stock market crash caused many to sell their shares in various companies, the happenings in the stock market drawing parallels to the overall economy. This, combined with the spread of COVID-19, caused a “rapid and historic drop in economic output,” according to CNBC

According to The Balance, a personal finance company, “The Dow fell 2,013.76 points that day (March 9, 2020) to 23,851.02. It had fallen by 7.79%. What some labeled as Black Monday 2020 was, at the time, the Dow’s worst single-day drop in U.S. market history.” In the following days, the Dow Jones, a collective measure of thirty of the most largely traded stocks, dropped 2,352.60 points on March 12th, and then 2,997.10 points on March 16th, setting a new record for the biggest one-day loss in Dow Jones history.

But despite the stock market crash, the United States’ economy recovered amazingly quickly as employees began to telecommute and the hope of vaccines brought stock prices up once more. Furthermore, the economy has rebounded sharply as a whole following the COVID-19 crisis. 

“The U.S. economy is simply amazing. The way, in this area in particular, that people have been able to telework and continue to deliver goods and services is nothing short of astounding,” Feeney stated.  

Despite the constant changes in the values of many different stocks during the COVID-19 pandemic, a variety of unexpected events have also occurred in the stock market, including the Reddit Gamestop stock situation. According to CNN, the Reddit Gamestop situation involved two main parties: a large group of younger investors that resided on the Reddit page of WallStreetBets and professional Wall Street hedge funds. Due to the fact that many hedge funds were “shorting” Gamestop stock, many of the Reddit investors decided to invest in the same Gamestop stock in the hopes of making a profit, as well as making the hedge funds lose out on billions. 

“Gamestop was considered by many professional investment firms to be headed for bankruptcy. Because of this, they made a wager that they could “short” the stock. Shorting a stock means borrowing the stock today for sale at a later date (in simple terms). However, a number of independent investors came together to invest more and more money into Gamestop stock and inflated the price,” said Tynan. 

The stock market throughout the past year has been a roller coaster with many highs, lows, and unforeseen events. From the original stock market crash to the chaotic events of the Reddit Gamestop stock circumstance, the stock market during COVID-19 has been one-of-a-kind.