Stock Market Crash & Presidents

While Trump has not been best friends with the stock market since the second inauguration:

https://x.com/michaelbatnick/status/1908143884707750082

There were posts like this going around:

https://x.com/TheMaineWonk/status/1907902568182804727

Looking at point drops exaggerates the situation quite a bit, as the index has been higher under Trump than during earlier extreme moves. We will be looking at percentage moves instead to level the playing field.

Crashes happened because of external events outside of the immediate control of Presidents or failures in the financial system. This time it's different, as it is completely under Trump's control.

https://x.com/bespokeinvest/status/1909040003398709621

---

With some of the dust settled, I wanted to see how much truth there is and also which President was in office during the biggest daily gains and drops.

---

10 Largest One-Day Drops in the S&P 500 (Percentage)

1. October 19, 1987: -20.47%

   • President: Ronald Reagan
   • Context:
     • Known as "Black Monday," this crash was triggered by a combination of program trading, overvaluation, and market panic.
     • The use of portfolio insurance strategies amplified the sell-off as automated systems dumped stocks rapidly.

2. October 28, 1929: -12.82%

   • President: Herbert Hoover
   • Context:
     • Part of the Wall Street Crash of 1929, following "Black Thursday" (October 24), signaling the start of the Great Depression.
     • Margin debt and speculative excess had fueled a bubble that burst, leading to widespread bank failures.
     • The S&P did not recover its pre-crash level until 1954.

3. October 29, 1929: -11.73%

   • President: Herbert Hoover
   • Context:
     • Known as "Black Tuesday," this followed the prior day’s crash, deepening the panic as investors rushed to sell at any price.
     • It marked the end of the Roaring Twenties’ economic boom and the beginning of a decade-long depression.

4. March 16, 2020: -11.98%

   • President: Donald Trump
   • Context:
     • The COVID-19 pandemic triggered this plunge as global lockdowns loomed, sparking fears of economic collapse.

5. November 6, 1929: -9.92%

   • President: Herbert Hoover
   • Context:
     • Another wave of selling in the aftermath of the 1929 crash, as confidence continued to erode.

6. October 15, 2008: -9.03%

   • President: George W. Bush
   • Context:
     • The 2008 financial crisis intensified after Lehman Brothers’ collapse.
     • Credit markets froze, and fears of a global recession drove massive sell-offs across all sectors.

7. December 1, 2008: -8.93%

   • President: George W. Bush
   • Context:
     • The financial crisis deepened as economic data confirmed a severe recession was underway.
     • Investors panicked over declining consumer spending and rising unemployment amid the housing collapse.

8. March 12, 2020: -9.51%

   • President: Donald Trump
   • Context:
     • The COVID-19 crisis escalated with travel bans and rising case counts, hammering travel and energy stocks.
     • Circuit breakers halted trading as the market plummeted at the open, reflecting global fear.

9. October 5, 1931: -8.92%

   • President: Herbert Hoover
   • Context:
     • The Great Depression worsened as bank failures spread and international trade collapsed.
     • Britain’s abandonment of the gold standard weeks earlier triggered global financial instability.

10. September 17, 2001: -8.87%

    • President: George W. Bush
    • Context:
      • Markets reopened after the 9/11 attack, sparking a sharp sell-off.
      • Airlines and insurance stocks were hit hardest due to direct impacts from the attacks.

---

10 Largest One-Day Rises in the S&P 500 (Percentage)

1. March 15, 1933: +15.34%

   • President: Franklin D. Roosevelt
   • Context:
     • This surge followed FDR’s inauguration and the Emergency Banking Act, stabilizing the banking system.
     • Markets had been closed for a bank holiday to prevent further runs, restoring some confidence.
     • It marked a turning point in the Great Depression, though full recovery took years.

2. October 21, 1987: +9.10%

   • President: Ronald Reagan
   • Context:
     • This rebound came two days after Black Monday, as bargain hunting and Fed assurances calmed nerves.
     • The Fed pledged liquidity, and traders saw the prior drop as an overreaction.
     • It was a sign of resilience, though volatility persisted for weeks.

3. March 24, 2020: +9.38%

   • President: Donald Trump
   • Context:
     • Congress neared a $2 trillion stimulus deal to counter COVID-19’s economic damage, boosting optimism.
     • The Fed’s aggressive interventions, including unlimited QE, supported the rally.
     • It was a rare bright spot in a brutal month, signaling hope for a bottom.

4. October 13, 2008: +11.58%

   • President: George W. Bush
   • Context:
     • Global central banks injected liquidity and the U.S. unveiled bank bailout plans, lifting markets.
     • The rally followed weeks of steep declines in the financial crisis, offering temporary relief.
     • It was the largest single-day point gain at the time (104.13 points), though volatility continued.

5. October 28, 2008: +10.79%

   • President: George W. Bush
   • Context:
     • Bargain hunters stepped in after a brutal October, and hopes of Fed rate cuts fueled the surge.
     • The financial crisis was still raging, but oversold conditions triggered a sharp bounce.
     • It was a brief respite, as the S&P hit new lows weeks later.

6. March 23, 2020: +9.29%

   • President: Donald Trump
   • Context:
     • The Fed announced unprecedented support, including buying corporate bonds, sparking a rally.
     • Investors anticipated a massive stimulus package, which materialized days later.
     • It marked the start of a rapid recovery from the COVID crash’s trough.

7. October 30, 1929: +12.34%

   • President: Herbert Hoover
   • Context:
     • A technical rebound followed Black Tuesday, as traders bought after the massive sell-off.
     • Prominent bankers attempted to stabilize the market with public purchases, boosting sentiment briefly.
     • The rally was short-lived, as the Depression’s full impact soon overwhelmed optimism.

8. September 21, 1932: +11.36%

   • President: Herbert Hoover
   • Context:
     • Rumors of economic stabilization and potential government action drove this Depression-era bounce.
     • The market was at historic lows, making large percentage moves more feasible.
     • It was a fleeting uptick, as the index remained far below pre-1929 levels.

9. October 20, 1987: +5.33%

   • President: Ronald Reagan
   • Context:
     • This rise followed Black Monday, part of a stabilization effort as the Fed intervened.
     • Confidence grew that the crash was a technical event rather than an economic collapse.
     • It set the stage for the larger rebound the next day (October 21).

10. November 13, 2008: +6.92%

    • President: George W. Bush
    • Context:
      • Treasury Secretary Paulson’s shift to direct bank aid from TARP funds lifted financial stocks.
      • Oversold conditions and hopes of stabilizing the housing crisis spurred buying.
      • It was a volatile period, with the S&P still far from its pre-crisis peak.

---

S&P 500 Drops and Rises During Donald Trump’s Presidency (Jan 20, 2017 – Jan 20, 2021)

Below are the largest one-day percentage drops and rises in the S&P 500 from the top 10 lists that occurred during Donald Trump’s presidency, all tied to the COVID-19 crisis in March 2020.

Largest One-Day Drops

1. March 16, 2020: -11.98%

   • President: Donald Trump
   • Context:
     • The COVID-19 pandemic triggered this plunge as global lockdowns loomed, sparking fears of economic collapse.
     • The drop came despite a Federal Reserve rate cut, reflecting deep uncertainty about the virus’s impact.
     • It was the worst day since 1987, pushing the S&P 500 into a bear market in just 16 trading days from its peak.

2. March 12, 2020: -9.51%

   • President: Donald Trump
   • Context:
     • The COVID-19 crisis escalated with travel bans and rising case counts, hammering travel and energy stocks.
     • Circuit breakers halted trading as the market plummeted at the open, reflecting global fear.
     • It was part of a rapid 34% decline from the February peak, one of the fastest drops in history.

Largest One-Day Rises

1. March 24, 2020: +9.38%

   • President: Donald Trump
   • Context:
     • Congress neared a $2 trillion stimulus deal to counter COVID-19’s economic damage, boosting optimism.
     • The Fed’s aggressive interventions, including unlimited QE, supported the rally.
     • It was a rare bright spot in a brutal month, signaling hope for a bottom.

2. March 23, 2020: +9.29%

   • President: Donald Trump
   • Context:
     • The Fed announced unprecedented support, including buying corporate bonds, sparking a rally.
     • Investors anticipated a massive stimulus package, which materialized days later.
     • It marked the start of a rapid recovery from the COVID crash’s trough.

Comparison

• Number of Events:
  • Trump’s presidency saw 2 drops and 2 rises in the top 10 lists, all concentrated in March 2020.
• Magnitude:
  • The largest drop (-11.98%) exceeded the largest rise (+9.38%), showing sharper downward shocks.
  • The second drop (-9.51%) and rise (+9.29%) were nearly equal, reflecting some balance in volatility.
• Contextual Factors:
  • Drops were driven by pandemic-related panic and uncertainty, with rapid sell-offs.
  • Rises stemmed from swift policy responses (Fed actions and stimulus), highlighting market reliance on intervention.
  • All events occurred within a 12-day span (March 12–24, 2020), marking an intensely volatile period.
• Net Impact:
  • Combined drops totaled -21.49%, while rises totaled +18.67%, a net negative swing over these days, though a broader recovery followed later in 2020.

---

This comparison highlights the extreme market swings during Trump’s first term, driven by the unprecedented COVID-19 crisis and countered by significant policy actions.

Large, single-day drawdowns are limited because of circuit breakers (Trading curb).

These limits were put in place beginning in January 1988 (weeks after Black Monday occurred in 1987) to reduce market volatility and massive panic sell-offs, giving traders time to reconsider their transactions.

At the start of each day, the NYSE sets three circuit breaker levels at levels of 7% (Level 1), 13% (Level 2) and 20% (Level 3). These thresholds are the percentage drops in value that the S&P 500 Index would have to suffer in order for a trading halt to occur. Base price levels for which these thresholds will be applied are calculated daily based on the preceding trading day's closing value of the S&P 500. Depending on the point drop that happens and the time of day when it happens, different actions occur automatically: Level 1 and Level 2 declines result in a 15-minute trading halt unless they occur after 3:25pm, when no trading halts apply. A Level 3 decline results in trading being suspended for the remainder of the day.[2]

[Stock market crash](https://en.wikipedia.org/wiki/Stock_market_crash)

Notes

• List of largest daily changes in the S&P 500 Index
• List of presidents of the United States
• List of recessions in the United States

---

Vote for my witness: @blue-witness