Abstract
The outbreak of Corona Virus Disease in 2019 (COVID-19) has had a severe and long-lasting impact worldwide, with unprecedented disruptions to the US stock market in particular. This paper collects global and US data throughout the outbreak and develops empirical models, including a VAR model and an ARMA-GARCH model, to examine the dynamic impact of COVID-19 on the US stock market. According to the findings, COVID-19 will induce market volatility in the short term, as evidenced by shocks from new confirmed cases causing future shocks in returns that are decreasing in magnitude. In the long term, however, COVID-19 will not cause volatility in the US equity market. Therefore, depending on the stage, it is beneficial for investors to adopt appropriate strategies and the US government must develop effective policies.
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