Why Is the Stock Market Up When the Economy Is Tanking? Here Are 3 Big Reasons

By Jeremy Bowman

The stock market isn’t the economy.

You’ve probably heard that saying before, but it’s never been as true as it is today. The U.S. economy is reeling in a crisis of proportions not seen since the Great Depression. Twenty-two million Americans have filed for unemployment in the last four weeks, effectively erasing 10 years of job gains. Retail sales plunged in March, and small businesses exhausted the $350 billion in funding from the Paycheck Protection Program in less than two weeks.

However, the stock market is suddenly soaring. After plunging for about a month while the coronavirus outbreak spread to Europe and then the U.S., the S&P 500 suddenly reversed course after hitting bottom on March 23. Since then, the broad market has surged by as much as 31%, posting record gains along the way as the index had its best week since 1974 earlier in April.

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