Demonstrators gathered in Minneapolis on May 28 following the killing of George Floyd.

Photo: Carlos Gonzalez/Zuma Press

U.S. stocks have been on a tear, with investors seemingly looking past everything from rising tensions with China to the toll of a pandemic that has brought the global economy to a standstill.

This week, as thousands of protesters flooded U.S. streets, the stock market behaved no differently: The S&P 500 rose in four of the past five trading sessions, climbing 4.9% for the week—its best performance since the week ended April 9.

The optimistic trajectory of the market sharply contrasts with the civil unrest that has gripped the nation since George Floyd, a black man, was killed May 25 in police custody. Since the circulation of the initial video of his death—which captured a white Minneapolis police officer kneeling on Mr. Floyd’s neck as he pleaded that he couldn’t breathe—protests against police brutality and killings of unarmed black Americans have emerged across the nation.

The breadth of the protests—as well as the government responses that they have elicited—mark a level of civil unrest that some say hasn’t been seen in decades. Dozens of cities implemented curfews this week. The National Guard reached historic levels of deployment. Marches sprouted in normally quiet small towns. Buildings and cars were set ablaze, and interactions between protesters and police escalated in some cities.

Nevertheless, stocks climbed higher, in part, because of a strong rally Friday after the Labor Department released its May jobs report. The U.S. unemployment rate declined and employers added 2.5 million jobs, pushing the S&P 500 up 2.6% for the day. Stocks from Apple Inc. to UnitedHealth Group Inc. to Home Depot Inc. set records.

History would suggest the market tends to be unaffected by periods of civil upheaval, natural disasters or other such events—especially if investors perceive that they won’t hurt the broader economy, analysts and traders say.


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“There’s a heck of a lot that the market is seemingly ignoring right now, in addition to the protests,” said Liz Ann Sonders, chief investment strategist at Charles Schwab & Co. “But if you look back at the history of large-scale civil unrest…the market tended to sort of look through that. You didn’t tend to see significant weakness either while it was happening or in the aftermath.”

Take, for example, 1968—a year so volatile that Smithsonian Magazine dubbed it “The Year that Shattered America.” Despite low unemployment and relatively low gas prices, tensions were building across the country. The U.S. was in the midst of the Vietnam War, inflation was rising and a viral influenza killed roughly 100,000 Americans. Racial tensions had been building for years by the time Martin Luther King Jr. was assassinated that April. His death set off a wave of nationwide rebellion.

Yet in the week following his death—as the nation was enveloped in protest—the S&P 500 rose 2.9%, according to Dow Jones Market Data. One month after his assassination, the benchmark index was up 5.1%. It gained 7.7% that year, defying all of the turmoil that the U.S. faced.

Soldiers on the streets in Washington, D.C., following the assassination of Martin Luther King Jr. in April 1968.

Photo: Michael Ochs Archives/Getty Images

The protests that followed Mr. King’s death were similar to the unrest happening across the U.S. today, said Heather Ann Thompson, a history professor at the University of Michigan who has studied policing and the criminal justice system.

“People had already been begging, pleading, protesting and sitting down nonviolently…so ‘68 was significant as this moment where it all comes to a head after King’s assassination,” Ms. Thompson said. She said the death of Mr. Floyd is a similar flashpoint after years of similar deaths of unarmed black Americans.

Similarly, the S&P 500 rallied 1.2% in the week after a jury in April 1992 found Los Angeles police officers not guilty of assault against Rodney King, a black man. A widely viewed video from a bystander had shown the officers beating Mr. King, leading to days of rioting in Los Angeles after the verdict. Still, the S&P 500 was up 0.8% one month after the jury’s decision.

Businesses were first hit by the coronavirus pandemic, then by the economic downturn, now some are reeling after being vandalized and looted. Photo: Scott Olson/Getty Images

The benchmark index also rallied in the week and month after the August 2014 death of Michael Brown, an unarmed black teenager, who was shot by a white police officer in Ferguson, Mo. His death led to sustained protest and new conversations about the dynamics between police and black Americans.

“The stock market is not something that necessarily goes up or down with the mood of the country,” said Thomas Lee, co-founder and head of research at Fundstrat Global Advisors.

Some investors say the current rally highlights the forward-looking nature of stocks. Rather than focusing on grim economic data and widespread civil unrest, traders are instead betting on the recovery of the economy and corporate earnings—especially as drugmakers have given encouraging signs about their coronavirus vaccine progress. Massive intervention by the Federal Reserve, as well as anticipated additional stimulus measures from the U.S. government, has also buoyed markets.

Protests in Los Angeles in April 1992 after the acquittal of four police officers in the beating of Rodney King.

Photo: DON EMMERT/AFP/Getty Images

Critics, in contrast, have argued that the rally is the latest sign of the disconnect between Wall Street and Main Street. Despite the progress seen in Friday’s jobs report, the unemployment rate is still exceptionally high and 21 million workers remained unemployed.

Nationwide protests, meanwhile, show no signs of abating.

Investors said that the markets have brushed off the civic unrest because any economic damage caused by the protests will likely be unable to match the harm inflicted by the virus. “The damage has already been done,” said Brad McMillan, chief investment officer at Commonwealth Financial Network.

Still, that doesn’t mean financial markets and the economy will be immune if the protests escalate, analysts and traders say. Significant property destruction could hamper the operations and sentiment of small businesses that were already struggling to reopen. And it remains unclear if the mass gatherings will lead to a second wave of coronavirus infections. If a spike in cases occurs, that could slow the country’s economic recovery, while limited new infections could signal the worst of the virus is over, energizing markets.

Seema Shah, chief strategist at Principal Global Investors, said the impact of the protests on markets will likely be greater if they stretch for an extended period and become a focus of the 2020 presidential election.

“It’s when there’s an election approaching that investors start to take real notice,” Ms. Shah said. “The impact of these protests will come closer into view.”

Demonstrators in Ferguson, Mo., raised their arms and chanted as they protested the shooting death of Michael Brown in August 2014.

Photo: Joe Raedle/Getty Images

Write to Caitlin McCabe at

Corrections & Amplifications
The acquittal of police officers in the beating of Rodney King led to protests and riots in Los Angeles in 1992. An earlier version of this article included a photo caption that incorrectly said Mr. King’s death sparked the protests. (Corrected on June 5)

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