Nasdaq · September 23, 1998

The day the banks took the hedge fund on

+3.68%

single-day change vs previous close

Part of a longer stretch

The Russia shock on the Nasdaq

near the end of it · 1998-07-20 → 1998-10-08, -29.55% over the whole period

What happened that day?

23 September 1998 — the Nasdaq rose 3.68%
With the New York arm of the US central bank convening it, fourteen banks agreed that day to take on a large hedge fund
The fund ran an extreme ratio of borrowed money. Letting it simply fail could have taken its lenders down in a chain
After Russia said in the summer that it could not pay its debts, the fund's capital had almost vanished within months
The Nasdaq rose more than the S&P 500 because it had been sold harder in the panic. What falls furthest comes back first
The agreement did not turn the direction, though. The episode low came a fortnight later, on 8 October
From the July high to the October low the index fell 29.55%, and the old high returned on 27 November

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.