In a blow few saw coming, COVID-19 became the driving force in the market. The S&P 500 fell 20%, its worst quarterly loss since 2008. The fall was lightning fast. The S&P 500 reached an all-time high of 3,386 on February 19, but a few weeks later, on March 23, it dropped to a low of 2,237, before rebounding to 2,585 at quarter’s end.
Volatility ruled the day as large swings seemingly happened every day as new data were released. The 10-year Treasury yield opened the quarter at 1.92% and closed the quarter at 0.69%. Oil prices collapsed on the double whammy of a price war and slack in demand. The Federal Reserve dropped interest rates to zero.
However, this is not a financial crisis, per se, so comparisons to recent bear markets are difficult. Perhaps an apt comparison is 1987 or 2018 when the markets fell far and fast on nonfinancial contagion news and quickly recovered.