S&P 500 · August 27, 1998
The day the ruble broke and trading stopped
-3.84%
single-day change vs previous close
Part of a longer stretch
Russia's default and LTCM
near the end of it · 1998-07-17 → 1998-08-31, -19.34% over the whole period
What happened that day?
- The S&P 500 fell 3.84% on the day — the second-worst single session of this decline
- Russia's ruble broke that week, and on this day currency trading itself was halted
- Two weeks earlier Russia had declared it could not pay its government debt. It had been a long time since a country that size had actually not paid
- The problem was not Russia's size. A large US hedge fund that had bet heavily on Russian bonds began to fail here
- A month later the Fed convened the banks to wind that fund down — a rare case of a central bank moving because of one firm's books rather than the market's
- This decline ended at the end of August, and the market recovered 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 written from the sources listed above.