Between 1946 and 1962, the S&P 500 plunged more than 4% in a single day exactly ten times. Price controls, Cold War terror, a Korean invasion, a president’s heart attack, and the first electronic-age crash — the market’s earliest modern catastrophes have been almost entirely forgotten.
The S&P 500 index in its modern form dates to March 4, 1957, when Standard & Poor’s expanded its stock composite from 90 to 500 companies. But daily price data exists back to 1928, and from 1943 forward the series is continuous and reliable enough to analyze single-day moves with precision. Between 1946 and 1962 — seventeen years that spanned the postwar boom, the Cold War’s deepest freeze, and the dawn of the space age — the index suffered exactly ten trading days with declines exceeding 4%.
Today, almost nobody remembers any of them. The crashes of 1987, 2008, and 2020 dominate the financial imagination. But the market’s first modern collapses were every bit as terrifying to the people who lived through them — and the causes reveal how different the financial world used to be. Four of the ten worst days occurred in a single year: 1946. And the triggers — government price controls, surprise election results, a foreign invasion, a presidential health scare — sound almost quaint compared to the algorithmic contagion of later decades. But the fear was real, the losses were real, and the lessons endure.
The year 1946 stands alone in S&P 500 history. No other calendar year in this series produced four separate -4% days. To understand why, you need to understand what the American economy looked like in the months after V-J Day.
For four years, the federal government had controlled nearly every price in America. The Office of Price Administration (OPA) set ceilings on meat, gasoline, steel, rubber, and thousands of other goods. When the war ended, 12 million soldiers began coming home, consumer demand exploded, and the question of when to lift price controls became the most contentious political issue in the country.
February 25, 1946 — down 4.57%. The first crash came as Congress debated the future of the OPA. Investors feared that removing controls would unleash devastating inflation, while keeping them would strangle economic recovery. The market sold off on uncertainty alone — neither outcome seemed tolerable.
September 3, 1946 — down 9.91%. This was the big one. The worst single-day decline in the entire 1946–62 period, and one of the worst in the S&P 500’s early history. Over the summer, President Truman had vetoed one OPA extension bill, signed a weaker replacement, and then watched helplessly as meat shortages spread across the country. Ranchers held cattle off the market in anticipation of higher prices. Consumers couldn’t find beef in grocery stores. On September 3, the market opened after the long Labor Day weekend to a wave of selling that never relented. The index fell from 16.65 to 15.00 in a single session — a 9.91% plunge that wiped out weeks of gains.
September 9, 1946 — down 5.24%. The selling continued. Six days after the initial crash, the market fell another 5.24% as investors realized the economic uncertainty was not a one-day event but a structural crisis. The S&P 500 was now down more than 15% from its May peak.
November 6, 1946 — down 4.31%. The midterm elections. Republicans swept both houses of Congress for the first time since 1928, running on a platform of dismantling price controls and cutting government spending. The market, which might have been expected to cheer pro-business Republicans, instead sold off on fears that the policy transition would be chaotic. Truman finally lifted all remaining price controls on November 9. The S&P 500 finished 1946 down 11.3% — the worst year since 1941.
The next two years brought relative calm, but 1948 delivered three more -4% days across two very different catalysts.
February 4, 1948 — down 4.24%. On February 25, 1948, communists seized power in Czechoslovakia in a Soviet-backed coup that shocked the Western world. But the market had begun selling off weeks earlier as tensions escalated. The February 4 crash came amid growing fears that the Soviets were preparing to expand their sphere of influence across all of Eastern Europe. The Truman Doctrine was barely a year old. NATO did not yet exist. For investors in early 1948, the Cold War felt less like a geopolitical standoff and more like a prelude to World War III.
November 3 and 5, 1948 — down 4.61% and 4.40%. Every poll, every pundit, and every newspaper predicted that Thomas Dewey would defeat Harry Truman in the presidential election. The Chicago Daily Tribune’s premature “Dewey Defeats Truman” headline has become the most famous photograph in American journalism. Wall Street had priced in a Dewey presidency — pro-business, low regulation, continuation of the Republican Congress’s agenda. When Truman won, the market panicked. The S&P 500 fell 4.61% on November 3 as results came in, and after a brief dead-cat bounce on November 4, it fell another 4.40% on November 5. Together, the two-day loss approached 9% — the cost of getting the most consequential election prediction of the century completely wrong.
June 26, 1950 — down 5.38%. On Sunday, June 25, 1950, North Korean forces crossed the 38th parallel and invaded South Korea. It was the first major military conflict of the Cold War, and for a terrifying moment, it looked like the opening act of a global confrontation between the United States and the Soviet Union. China had fallen to the communists just nine months earlier. The atomic bomb was barely five years old. On Monday morning, the S&P 500 opened to heavy selling and closed down 5.38%, falling from 19.14 to 18.11.
The decline was swift but relatively contained. From its June 12 peak of 19.40, the market fell to a trough of 16.68 on July 17 — a 14.0% decline. But the Korean War selloff proved to be one of the great buying opportunities of the century. By year-end, the S&P 500 had recovered to 20.43, and the 1950s bull market — one of the strongest in history — was underway. The index would nearly triple over the next five years.
September 25, 1955 — down 6.62%. On Saturday evening, September 24, President Dwight D. Eisenhower suffered a heart attack while vacationing in Denver, Colorado. The news broke over the weekend, giving investors forty-eight hours to contemplate the consequences before markets opened on Monday morning.
Eisenhower was the most popular president since FDR. His administration represented stability, prosperity, and a steady hand on Cold War policy. The bull market of 1953–55 had been built on “Ike confidence.” When the opening bell rang on September 25, the selling was immediate and overwhelming. The S&P 500 fell 6.62% — from 45.63 to 42.61 — the worst single day since the 1946 crashes. It was the market’s blunt verdict: this president is irreplaceable.
The damage, however, was limited. The peak-to-trough decline was only 10.6%, from 45.63 to 40.80. Eisenhower recovered, ran for reelection in 1956, and won in a landslide. The market recovered too. But September 25, 1955 established a pattern that would repeat throughout market history: the sudden incapacitation of a leader triggers an outsized, immediate sell-off that typically reverses once the uncertainty resolves.
May 28, 1962 — down 6.68%. The biggest single-day percentage decline in the entire 1946–62 period came not from war, politics, or presidential health, but from something far more modern: a cascading market panic amplified by early electronic trading systems.
The market had been weakening since January. President Kennedy’s confrontation with U.S. Steel over price increases in April rattled business confidence. By late May, the S&P 500 had already fallen 15% from its December 1961 peak of 72.64. Then, on May 28, selling accelerated into what the press called the “Flash Crash of 1962” — the term itself a harbinger of the electronic crashes that would define later decades. The index plunged 6.68% in a single session, from 59.47 to 55.50.
The Kennedy Slide continued through June, bottoming at 52.32 on June 26 — a 28.0% peak-to-trough decline that qualifies as a near-bear-market by any definition. But the recovery was swift. By September the market had clawed back most of the losses, and by year-end the S&P stood at 63.10. The crash of 1962 taught a lesson that investors would relearn in 1987, 2010, and 2020: when the market falls fast without a corresponding economic crisis, the recovery is usually fast too.
| Date | Return | Close | Prior Close | Peak→Trough | Catalyst |
|---|---|---|---|---|---|
| Feb 25, 1946 | −4.57% | 16.91 | 17.72 | −28.5% 19.25→13.77 | OPA price control debate |
| Sep 3, 1946 | −9.91% | 15.00 | 16.65 | Truman lifts price controls | |
| Sep 9, 1946 | −5.24% | 15.01 | 15.84 | Continuation of Sep selloff | |
| Nov 6, 1946 | −4.31% | 14.67 | 15.33 | Republican midterm sweep | |
| Feb 4, 1948 | −4.24% | 14.00 | 14.62 | −20.6% 17.06→13.55 | Cold War escalation / Czechoslovakia |
| Nov 3, 1948 | −4.61% | 15.93 | 16.70 | Truman surprise election win | |
| Nov 5, 1948 | −4.40% | 15.43 | 16.14 | Election aftermath | |
| Jun 26, 1950 | −5.38% | 18.11 | 19.14 | −14.0% 19.40→16.68 | North Korea invades South Korea |
| Sep 25, 1955 | −6.62% | 42.61 | 45.63 | −10.6% 45.63→40.80 | Eisenhower heart attack |
| May 28, 1962 | −6.68% | 55.50 | 59.47 | −28.0% 72.64→52.32 | Kennedy Slide / Flash Crash of ’62 |
Ten days. Five crises. Four of them in a single year. The forgotten crashes of 1946–62 reveal something essential about markets: the causes change, but the pattern doesn’t. A sudden shock — political, military, medical — triggers a wave of selling that overshoots in proportion to the uncertainty. Investors extrapolate from the worst-case scenario. And then, almost always, reality turns out to be less catastrophic than feared.
The S&P 500 opened 1946 at 17.25 and closed 1962 at 63.10. An investor who endured all ten of these crashes — including a 9.91% single-day wipeout — earned a total return of 266%. The crashes were real. The fear was real. But the only permanent damage was done to those who sold into the panic and never bought back.
In the next episode, we turn to the most infamous crash in market history: October 19, 1987 — Black Monday — and the aftershocks that followed.