What happened

Mastercard (MA -1.12%) beat a booming market last year. The stock gained 19% in 2020 compared to the 16% increase logged by the S&P 500, according to data provided by S&P Global Market Intelligence.

Shares of the financial services giant dropped by 30% in concert with the wider market's March swoon. But the stock recovered all that lost ground and more in the months that followed.

A woman enters her credit card information into a smartphone.

Image source: Getty Images.

So what

Investors pegged Mastercard as a likely early loser from the COVID-19 pandemic, and the credit card specialist confirmed some of those fears in its next two earnings reports. Profitability fell in the quarter that ended in late March, management announced on April 29, and sales volumes turned sharply negative in the fiscal second quarter. Mastercard posted a 6% sales drop and a 20% slump in net income for the first half of 2020.

The stock's trajectory improved in the latter months of 2020 as fears of a deep recession subsided. Mastercard added to this optimism by noting in late October that its purchase volume returned to positive territory in the fiscal third quarter.

Now what

It might be a few more quarters before Mastercard begins setting new overall sales records, especially as travel and vacation spending remains depressed in early 2021. Investors will have much more clarity about those trends when executives post their final 2020 operating results in late January.