Nasdaq · October 8, 1998

The Russia shock on the Nasdaq

-29.55%

peak-to-trough, the whole slide

57 trading days · 1998-07-20 → 1998-10-08

back to the old high on 1998-11-27

What happened that day?

From the 20 July 1998 peak to the 8 October low the Nasdaq fell 29.55% — 57 trading days
The causes were Russia declaring it could not pay its government debt and the collapse of the hedge fund LTCM
In a crisis investors sell the riskiest things first, and Nasdaq names sat in that bucket
The Fed cut rates three times in two months to put it out
The recovery was very fast — the old high was back on 27 November, under two months from the low
That bounce ran straight into the final phase of the dot-com bubble, and the Nasdaq climbed much further over the next 18 months

Sources

1998 Russian financial crisis
Long-Term Capital Management

Every figure on this page is recomputed from the original daily closing prices and checked against them at build time. The account of what happened is written from the sources listed above.