Nasdaq · August 29, 2007
Expecting the Fed to step in
+2.50%
single-day change vs previous close
Part of a longer stretch
Fifteen months that ran right up to the crisis
near the end of it · 2006-07-21 → 2007-10-31, +41.51% over the whole period
What happened that day?
- The Nasdaq rose 2.5% on the day
- With credit markets frozen through August, expectations grew that the Fed would cut rates
- Mid-month it had already lowered the rate at which it lends to banks directly. The policy rate was assumed to be next
- The market's reaction function flipped in this period. Weak data often lifted shares, on the grounds that it would make the Fed act
- The Fed did cut the policy rate sharply three weeks later
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.