WhyItDropped

S&P 500 · April 1, 2008

The spring everyone thought it was over

+3.59%

single-day change vs previous close

Part of a longer stretch

The Global Financial Crisis bear market

midway through · 2007-10-09 → 2009-03-09, -56.78% over the whole period

What happened that day?

  • On 1 April 2008 the S&P 500 rose 3.59%
  • Two large banks announced big write-downs and capital raises at the same time
  • Recognising losses and refilling capital reads as the problem being handled, and the market read it that way
  • Since the March rescue, the view had spread that the worst was past
  • The index did keep rising into May. This recovery lasted five months
  • No single trigger can be pinned to this day
  • In this stretch the index was 19.86% below its peak

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.