Reference no: EM133155762

Effect of the pandemic on trade

?As the pandemic continues taking shape in the market, some of the effects witnessed among the investors is the fall of stock and the rise in the inflation rate in various countries. This news article describes the fall of stock on Wall Street on Friday of 22nd January 2022 which capped off the worst drop in a week that stood at S&P 500 since the onset of the pandemic(Osterholm & Olshaker 2020). I find the article to be significant for analysis based on its link to this week's study on the impact of the pandemic on the stability of both the domestic and the global markets. The article points out the growing rate of inflation and how aggressive the Federal Reserve might be when it comes to influencing the rise in the interest rates to put it down. In checking out the history of the pandemic on the interest rates, the low rate could help the broader market where the economy could absorb a sharp hit from the effects oof the pandemic with the rate of recovery in 2020 (Sahu & Kumar (2020).

?Pointing out some direct effects of the pandemic to the industrial stability, the S&P 500 was able to drop 84.79 points to 4397.94 where in a single week it had dropped by 5.7% making the worst ever decline since March of 2020 when the pandemic had hit the market the first time. The Dow Jones industry is another example of those industries that faced the downfall as it fell 450.02 points which is a fall by 1.3% to 34265.37 falling for its third straight week (Kirk & Rifkin 2020). Another example of the company that witnessed an immense fall was the tech-heavy Nasdaq that fell 385.10 that is a 2.7% fall to 13768.92 affecting a large number of investors that make up the shareholders of these senior companies in the market. This connects to the lesson concept discussed in the current events in the market that is the effect of the pandemic on the change of stock in the market.

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