S&P 500 · August 24, 1981

The summer rates had nowhere higher to go

-2.89%

single-day change vs previous close

Part of a longer stretch

The Volcker rate shock

midway through · 1980-11-28 → 1982-08-12, -27.11% over the whole period

What happened that day?

24 August 1981 — the S&P 500 fell 2.89% to close at 125.50. No single cause can be pinned to the day
The American policy rate that year had climbed to the highest level in its history, because the central bank had decided to break inflation
At rates that high there is less reason to hold shares. Money in the bank is a far more certain return
From that summer the economy also began to turn down in earnest — the start of what was later recorded as a long recession
High rates and a weak economy are both bad for equities. The 1981 summer decline was that combination
From the late-April high to the 25 September low the index fell 16.76%
The long climb began in the summer of 1982, once inflation broke and rates started coming down

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.