If you read all of the gloom and doom headlines from across the country you’ll see a fairly consistent theme. Despite the pandemic dying down in some places (while admittedly surging a bit in others), there are still a lot of businesses that are closed. Workers are stuck on unemployment in droves and many of the smaller employers are reaching the point where the owners aren’t sure if they will ever be able to come back. All of this adds up to a pretty dismal outlook for the economy, at least in the short term.
With that in mind, the Associated Press notes one other headline that’s not making nearly as big of a splash. The stock market is experiencing a significant boom, with the S&P 500 moving into record territory. How can that be? That leads to their headline question. How can Wall Street be so healthy when Main Street isn’t?
The stock market is not the economy.
Rarely has that adage been as clear as it is now. An amazing, monthslong rally means the S&P 500 is roughly back to where it was before the coronavirus slammed the U.S, even though millions of workers are still getting unemployment benefits and businesses continue to shutter across the country.
The S&P 500, which is the benchmark index for stock funds at the heart of many 401(k) accounts, ended Tuesday at 3,380.35 after briefly topping its closing record of 3,386.15 set on Feb. 19. It’s erased nearly all of the 34% plunge from February into March in less time than it takes a baby to learn how to crawl.