Published: August 19, 2020

For Wall Street, Tuesday brought the best of both worlds – low risk and high reward. Not only did the S&P 500 Index erase all loses from COVID-19 as it set a new record closing price, but at the same time, a key measure of overall investor uncertainty dipped to its lowest level of the pandemic.

Such a swift 'normalization' in either of the benchmarks – much less both – would have been virtually unimaginable in the spring. On both counts, it's been a stunning comeback from the sharpest economic recession and deadliest viral outbreak in a century:

  • The S&P 500 Index, which closed at 3,390 on Tuesday, bottomed out more than 1,000 points lower just five months ago, according to S&P Global Market Intelligence. Even as recently as the final days of May, before companies reported their historically horrendous Q2 financial results, the benchmark index was still trading below 3,000.
  • Meanwhile, the CBOE Volatility Index (or VIX, which is sometimes referred to as the 'fear gauge' by investors) has eased by about one-third from where it was in June. More significantly, the VIX has plummeted by three-quarters from its record peak in March.
This astonishing recovery in the equity market has been mirrored by an astonishing recovery in the tech M&A market. Both markets operate on confidence to a large degree, so their performances tend to be closely correlated. (Looking back on the Credit Crisis, both the S&P 500 and overall spending on tech deals hit their lowest point in 2009 before starting a steady, decade-long bull run during which the level of both more than tripled.)

We have already noted the recent pickup in the business of buying and selling tech vendors. Data from 451 Research's M&A KnowledgeBase shows that acquirers have already spent more on deals in August than any month this year except July. This surge has put the current quarter on pace for the highest level of M&A spending in a half-decade, according to the M&A KnowledgeBase. It turns out Wall Street investors aren't the only ones buying into a low-risk, high-return time in the market.


Brenon Daly
Research Director

Brenon Daly oversees the financial analysis of the Market Insight and KnowledgeBase products at 451 Research, a part of S&P Global Market Intelligence, having covered more than a quarter-trillion dollars' worth of deal flow for both national publications and research firms.

Sheryl Kingstone
Research Director

Sheryl Kingstone leads 451 Research’s coverage for Customer Experience & Commerce, which covers the many aspects of how customer experience is a catalyst for digital transformation. She oversees the company’s coverage of a variety of customer experience software markets spanning ad tech, marketing, sales, commerce and service.

Keith Dawson
Principal Analyst

Keith Dawson is a principal analyst in 451 Research's Customer Experience & Commerce practice, primarily covering marketing technology. Keith has been covering the intersection of communications and enterprise software for 25 years, mainly looking at how to influence and optimize the customer experience.