The 2020 COVID crash, explained: how markets fell off a cliff, then recovered faster than almost anyone expected.

Originally reported as: “Stocks plunge into bear market territory as pandemic lockdowns spread worldwide”

In February and March 2020, as the COVID-19 pandemic spread and governments worldwide ordered lockdowns, the S&P 500 fell roughly 34 percent in about a month, one of the fastest drops into a bear market in modern history. US markets were so volatile that exchange-wide circuit breakers, which briefly pause trading during extreme swings, were triggered multiple times within a matter of weeks. Central banks and governments responded almost immediately with massive interest rate cuts and stimulus spending, and markets recovered all their losses to reach new highs in roughly five months, a remarkably fast turnaround compared to previous crashes that took years to fully recover from. The episode is often cited as a case study in both how quickly panic can hit markets and how quickly aggressive policy support can turn sentiment back around.