S&P 500 · May 26, 1970
The 1970 credit crunch
-25.86%
peak-to-trough, the whole slide
99 trading days · 1970-01-05 → 1970-05-26
back to the old high on 1971-01-19
What happened that day?
- From the 5 January 1970 peak to the 26 May low the S&P 500 fell 25.86% — 99 trading days
- Vietnam War spending and expanding social programmes through the 1960s had pushed inflation up
- The Fed tightened credit to contain it, and companies found short-term funding hard to get
- That year the big railroad Penn Central failed for want of funding — the largest US corporate bankruptcy up to that point
- It confirmed that when the plumbing of credit blocks, even healthy companies are at risk, and the fear grew
- The Fed released funds to put out the immediate fire and things settled. The old high returned on 19 January 1971
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 written from the sources listed above.