I don't think modern investors just don't-buy-stocks unless they need the money for something else. They invest in something. And if everything is doing poorly, that means the market doesn't change.
There's also the fact that many companies that are doing well right now are keeping quiet about it. I know from personal experience at the company I work for (fintech midsized startup) that executives are very careful not to be openly positive about benefiting from the pandemic. Publicly admitting that you profitted by a global pandemic and an economic recession is in poor taste, and companies are rightly tentative about doing so.
From my work I've seen anything adtech related explode. Publishers or aggregators whose primary revenue stream is online advertising income are growing at incredible rates. Assuming that everyone is hurting because physical businesses are hurting is a huge mistake.
Additionally, as many analysts have been saying, the pandemics primary effect so far has been to accelerate existing trends, not create new ones. We're seeing a fast-foward in economic transition. Companies that were well positioned before the pandemic for the economy of the future (automation, digital) are doing swimmingly.
It's weird situation because I'd be willing to bet that the people who own stocks are simply not the one that have been laid off.