During the Spanish flu pandemic of 1918-19, the US stock market barely noticed. This pandemic was global in extent, had a case fatality ratio of 2 to 3% (the same numbers bandied about for COVID-19), and killed anywhere between 10 and 100 million people globally at a time the Earth’s population was about one quarter of today’s. In the US, 28% of the population was infected, about half a million of whom died. Scaling to today’s population, that would be 1.5 million deaths.
The graph plots the monthly average value of the S&P Composite from the beginning of 1917 through the beginning of 1920. Note the suppressed zero, which exaggerates changes in the S&P. The gray bars represent the mortality in the UK, the only country for which I could find quantitative data. The height of each bar is proportional to the number of deaths in each interval; the width is roughly the period over which the deaths occurred.
The first case of Spanish flu was observed in the US in January of 1918, the year when most people died from the flu. That was a pretty good year for the market: a roughly 10% rise. There was a small decline around the time the most deaths occurred but this could easily be attributable to something else. The first half of 1919 was a robust bull market. The following couple of years (not plotted) had their ups and downs, followed by the Roaring Twenties.
Today, the US market rebounded about 5%. The volatility!