https://www.wired.com/story/covid-19-spreads-listen-stock-market/

Covid-19 was officially declared a pandemic Wednesday, and stocks officially entered a bear market, falling more than 20 percent from their peak just last month. The two milestones are related. Even in the best of times, markets are tuning forks not just for the sound of economic activity but for public sentiment about the future. Today, that sentiment is agitated, fearful, volatile. There are reasons to be concerned and to pay attention, and reasons as well to discount the most extreme moves.

Stock prices reflect expectations of future profits, and investors see the virus dampening economic activity and reducing profits. Until the extent of the decline is clearer, the natural reaction will be to sell. On the flip side, markets will almost certainly rebound before the world stabilizes. That happened in 2009, when markets reached their nadir in early March, long before the global economic recovery was certain. And it happened in October 2002, long before economic activity picked up after the tech bubble and 9/11 recession. And markets appear not to be factoring in any government stimulus in the form of tax cuts or new spending, which will likely be forthcoming.