Key Points
- CNN’s Fear & Greed Index currently signals fear among investors.
- Nine official stock market crashes have occurred since 1966.
- The S&P 500 has recovered from every single crash in its history.
According to CNN’s Fear & Greed Index, which tracks the emotions driving market behavior, fear is currently dominant. At the time of writing, the index sits at 35 out of 100—a level indicating significant apprehension. As sentiment deteriorates, concerns about a potential correction or crash naturally intensify.
While near-term market direction is impossible to predict, six decades of data offer a reassuring perspective: every previous crash has eventually been erased by a subsequent recovery.
A history of stock market crashes
A stock market crash is defined as a decline of at least 20% from a recent peak in a major index. Based on the S&P 500 (SNPINDEX: ^GSPC), nine such events have taken place over the last 60 years:
| Market Crash | Peak | Trough | S&P 500 Decline |
|---|---|---|---|
| Inflation & rate hike bear market | Jan. 3, 2022 | Oct. 12, 2022 | (25.4%) |
| COVID-19 crash | Feb. 19, 2020 | March 23, 2020 | (33.9%) |
| Global financial crisis | Oct. 9, 2007 | March 9, 2009 | (56.8%) |
| Dot-com bust | March 24, 2000 | Oct. 9, 2002 | (49.1%) |
| Black Monday | Aug. 25, 1987 | Dec. 4, 1987 | (33.5%) |
| Volcker tightening | Nov. 28, 1980 | Aug. 12, 1982 | (27.1%) |
| Stagflation & oil crisis | Jan. 11, 1973 | Oct. 3, 1974 | (48.2%) |
| Fed tightening & overvaluation | Nov. 29, 1968 | May 26, 1970 | (36.1%) |
| Credit crunch | Feb. 9, 1966 | Oct. 7, 1966 | (22.2%) |
Data source: Yardeni Research. A 19.9% decline from July 16, 1990, to Oct. 11, 1990, fell just short of the 20% threshold.
While portfolio drawdowns are never pleasant, the historical record provides a clear silver lining: the market has rebounded from every crash. Using the S&P 500’s closing level of 7,706.03 on Sept. 23, here is the total growth from each trough:
| Market Crash | Growth Since Trough |
|---|---|
| Inflation & rate hike bear market (2022) | +115.4% |
| COVID-19 crash (2020) | +244.4% |
| Global financial crisis (2009) | +1,039% |
| Dot-com bust (2002) | +892.1% |
| Black Monday (1987) | +3,341.4% |
| Volcker tightening (1982) | +7,424% |
| Stagflation & oil crisis (1974) | +12,273.2% |
| Fed tightening & overvaluation (1970) | +11,131.6% |
| Credit crunch (1966) | +10,427.4% |
Data source: YCharts.
Image source: Getty Images.
Don’t focus on trying to predict a crash
Preparation is prudent, but attempting to time a market crash is counterproductive. The fear of a downturn often leads investors to sit on the sidelines, causing them to miss substantial gains if the market continues to rise.
No one can reliably forecast short-term market movements. The most effective strategy is consistency: maintain your investment plan and trust in the market’s long-term ability to recover. For investors with a horizon extending beyond the near term, panic selling is among the most damaging actions—it locks in losses, can trigger unnecessary tax events, and forfeits participation in the inevitable rebound.
While past performance does not guarantee future results, the S&P 500’s enduring resilience remains one of the most reliable tendencies in financial markets.
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