S&P 500 · September 23, 1998

The day the banks agreed to take over a hedge fund

+3.54%

single-day change vs previous close

Part of a longer stretch

The rally after LTCM

early in it · 1998-08-31 → 1998-11-23, +24.12% over the whole period

What happened that day?

The S&P 500 rose 3.54% to close at 1,066.09
Brokered by the New York arm of the American central bank, fourteen banks agreed on this day to take over a large hedge fund
The fund was borrowed to an extreme degree. Letting it simply fail could have taken its lenders down in a chain
After Russia's default that summer, its capital had almost vanished within a few months
No public money went in. The central bank arranged the room; the banks paid the bill
The deal avoided the worst chain of failures but did not release the tension. What turned the market was a rate cut three weeks later
This market, down 19.34% over the summer, set a new record high within two months

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.