S&P 500 · October 1, 1990
The Monday after the budget deal
+2.90%
single-day change vs previous close
Part of a longer stretch
The Gulf War bear market
near the end of it · 1990-07-16 → 1990-10-11, -19.92% over the whole period
What happened that day?
- 1 October 1990 — the S&P 500 rose 2.90% to close at 314.94
- Over the weekend the White House and Congress had produced an agreement to cut the federal deficit, closing off months of negotiation
- Fixing the deficit creates room for long rates to fall. That was the part the market was watching
- A war crisis had started in the Middle East that summer and the oil price was far higher. Inflation and the economy were worsening together
- So the deal was less good news than one piece of bad news becoming smaller
- The low of this episode came ten days later, on 11 October. From the mid-July high the fall was 19.92%
- The package was then voted down once in the House and passed only after revision
Sources
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 put together from the public record; where a specific source was consulted it is listed above.