How to Think About the Plummeting Stock Market
No one knows exactly how much damage the coronavirus will do to the global economy, but investors have to guess.
Over the past week, stock markets around the world plunged as distressing news about the spread of the novel coronavirus continued to accumulate. In the United States, the three major stock indexes—the Dow Jones Industrial Average, the Nasdaq Composite, and the S&P 500—fell more than 10 percent below their recent peaks, a sharp decline that qualifies in Wall Street terminology as a market “correction.” One investor quoted in The Wall Street Journal called it a “bloodbath.”
The global stock market is, theoretically, the distillation of how investors think everything that happens in the world; it’s also how bad people it could be. Those might turn out to be two very different things.
