Stock Market 2020: How Much Did Wall Street Drop This Week? Coronavirus, Correction Hurt Investors

The stock market this week had its worst performance since the 2008 financial crisis, with the Dow Jones Industrial Average falling more than 3,500 points and the S&P 500 experiencing its fastest correction in history on Thursday. The coronavirus, officially known as COVID-19, has panicked investors, as the virus has impacted supply chains around the world.

Goldman Sachs has said that earnings growth for U.S. companies could stagnate in 2020 due to the ongoing outbreak.

“U.S. companies will generate no earnings growth in 2020,” Goldman Sachs chief U.S. equity strategist David Kostin wrote Thursday in a note to clients. “We have updated our earnings model to incorporate the likelihood that the virus becomes widespread.”

Former Federal Reserve Chair Janet Yellen said earlier in the week that it is a possibility that the coronavirus could push the U.S. into a recession.

"Market participants will look to the Fed to provide some support," Yellen said. “The Fed does have some scope — but it will provide a little bit of support to consumer spending and to the U.S. economy and for financial markets.”

Federal Reserve Chairman Jerome Powell hinted Friday that the central bank could cut interest rates next month.

“The fundamentals of the U.S. economy remain strong,” Powell said in a statement. “However, the coronavirus poses evolving risks to economic activity. The Federal Reserve is closely monitoring developments and their implications for the economic outlook. We will use our tools and act as appropriate to support the economy.”

Trump, a frequent critic of Powell, said he hopes the Fed gets involved due to the massive declines in the stock market. The Washington Post reported Friday that the Trump administration is considering emergency measures, such tax cuts and pressure on the Federal Reserve, in order to stimulate the economy amid the crisis.

Top U.S. officials have tried to downplay the coronavirus in order to keep the financial markets from plummeting further.

“Stocks looks pretty cheap to me,” National Economic Council Director Larry Kudlow told Fox Business on Friday, saying that there is no “guarantee” that cases of the coronavirus will skyrocket in the U.S.

White House Chief of Staff Mick Mulvaney has suggested that Americans should ignore media coverage of the coronavirus and claimed that this advice would calm the markets.

The coronavirus originated at an animal and seafood market in the Chinese city of Wuhan, with the first cases being identified in December. Since then, millions of people have been put on lockdown due to the virus, which has paralyzed the Chinese economy. The virus has killed more than 2,900 people worldwide, with 85,000 cases of infection.