S&P 500 · January 8, 1986
The first record drop the computers made
-2.73%
single-day change vs previous close
What happened that day?
- On 8 January 1986 the S&P 500 fell 2.73%. The Dow posted the largest point drop recorded to that date
- There was no particular piece of bad news. Contemporary accounts describe a fall the headlines could not explain
- The blame landed on program trading — computers placing large orders automatically once conditions were met
- Much of it arbitraged the gap between futures and shares. When one side moved, selling on the other followed by itself
- Nobody decided to sell. The condition was met and the sale happened, which made it fast
- The same mechanism returned on a far larger scale on Black Monday the following year
- Peak to trough it was only 4.82%
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.