Earlier in February, the S&P 500 index fell by 20% in just 16 days, ending a bull market that lasted more than 10 years and marking the start to a bear market. Even though the losses triggered by the pandemic have not fully recovered just yet, the soared by 27%, just in the last month of April.
Economists argue that one of the reasons this spectacular rally was able to form was thanks to the speedy response from central banks, which re-assured investors. The lowering of interest rates and the decline in bond yields encouraged investors to pursue equities, allowing the stock market index (S&P 500) to quickly bounce back.
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