Learn the stock market › Stock market crashes in history › Lesson 4 of 7
The 2008 financial crisis
How it began
The Federal Reserve's historians describe how mortgages became available in the early 2000s to borrowers who could not have got one before. Lenders bundled the loans and sold them to investors, and rising house prices hid the risk. When prices turned, losses rose. A leading subprime lender, New Century, went bankrupt in April 2007.
In the spring of 2008 JPMorgan Chase bought Bear Stearns with the Fed's help. In September 2008 Lehman Brothers filed for bankruptcy.
The crash
S&P 500, 2006–2013
S&P 500The high before the crash
| What | Date | S&P 500 |
|---|---|---|
| The high | Oct 9, 2007 | 1565.15 points |
| First close 20% below | Jul 9, 2008 | −20% |
| The low | Mar 9, 2009 | −56.8% |
| Back at the high | Mar 28, 2013 | five and a half years |
The S&P 500 first closed 20% below its high on Jul 9, 2008, and it had far further to go. Counted from that day, it stood −29.1% a year later and +6.0% three years later. The big days came in the fall of 2008, and the largest rises came among the largest falls.
| Date | In one day |
|---|---|
| Oct 15, 2008 | −9.0% |
| Dec 1, 2008 | −8.9% |
| Sep 29, 2008 | −8.8% |
| Oct 13, 2008 | +11.6% |
| Oct 28, 2008 | +10.8% |
| Nov 13, 2008 | +6.9% |
Between Nov 20, 2008 and Jan 6, 2009 the index rose 24.2%, and then it fell on to the low.
The companies
From the S&P 500's high to its low, dividends included.
| Company | From the index's high to its low |
|---|---|
| AMD | −84.5% |
| Nvidia | −77.5% |
| JPMorgan Chase | −64.9% |
| Alphabet | −52.7% |
| Netflix | +68.9% |
| Walmart | +7.4% |
| Mastercard | −12.0% |
The median of the 15 companies with closes from that time fell 43.5%. The worst were AMD at −84.5% and Nvidia at −77.5%. These are today's largest companies, so those that didn't survive are missing.
The response
The Federal Reserve cut its rate from 5.25 percent in September 2007 to 0–0.25 percent in December 2008. The recession ran from December 2007 to June 2009, unemployment rose from 5 to a peak of 10 percent, and house prices fell about 30 percent.
All twelve crashes side by side are in the study of every crash. See it on one stock: AMD.
Test yourself
Who bought Bear Stearns in 2008?
The index leaves out dividends. Closes through Nov 6, 2026.
Sources
- Federal Reserve History, Subprime Mortgage Crisis, The Great Recession and The Great Recession and Its Aftermath, read November 5, 2026.