Thursday in context: the biggest points fall on record, and about the 46th worst day since 1950
6th November 2026
The S&P 500 fell 4.36% on Thursday 5 November, its worst day since April 2025. At 335 points it was the largest fall in points in the index’s history, but about 45 days since 1950 have been worse in percentage terms. The index ended the day 5.95% below its 6 October record, which is unusually close, because falls this large have usually hit a market already well below its high.
How big was it
Headlines called Thursday the worst day since April 2025, and we expected that date to be further back, as it is only 19 months ago. A points record says little, because the index is far higher than it was. Black Monday’s 20.47% fall in 1987 would take 1,574 points off the index at Wednesday’s close price.
Falls of this size are rare and they bunch together, with 13 in 2008, eight in 2020 and none from 2012 to 2019.
A 6% drop from a high is ordinary. The S&P 500 has fallen at least that far at some point in 66 of the 76 calendar years from 1950 to 2025, and it is still up about 7% this year.
Chip shares fell hardest
The iShares Semiconductor ETF fell 12.15% on Thursday, while the equal-weighted S&P 500, in which every company counts the same, fell 2.89%. Reports tied the selling to doubts about the cost of financing the AI build-out and possible limits on data centre construction after Democrats’ midterm wins.
The gap is wider over the past month. From 7 October to Thursday’s close, the chip fund lost 32% and the Nasdaq 100 lost 14.5%, while the equal-weighted S&P 500 rose 3%, the FTSE 100 rose 3.1% and India’s Nifty 50 rose 8.6%. The chip fund is still up 31% on the year.
Stock markets in South Korea and Japan, which have large weightings in chip and AI-related companies, were hit too. Both fell more than 6% in early trading on Friday, and Korean trading was halted for 20 minutes after the Kospi index dropped more than 8%.
If you hold a global fund priced at the London close, its Thursday valuation may not show all of the fall, because London closes four and a half hours before New York.
What happened after similar days
Treating falls of this size less than three months apart as one episode, there were 15 before Thursday. In 11 of them, the index ended the first day more than 10% below its high. In ten, no fall as large followed in the next three months. In the other five, including 2008 and 2020, more did.
A year after the first day, the S&P 500 was higher in ten of the 15 episodes. Picking any day since 1950 would have given a higher share, about 75%, so a bad day on its own has been no signal to buy. The lowest point during that year was typically about 8% below the first day’s close, and in five episodes it was more than 18% below. The table shows the last six.
Headlines called Thursday the worst day since April 2025, and we expected that date to be further back, as it is only 19 months ago. A points record says little, because the index is far higher than it was. Black Monday’s 20.47% fall in 1987 would take 1,574 points off the index at Wednesday’s close price.
Falls of this size are rare and they bunch together, with 13 in 2008, eight in 2020 and none from 2012 to 2019.
A 6% drop from a high is ordinary. The S&P 500 has fallen at least that far at some point in 66 of the 76 calendar years from 1950 to 2025, and it is still up about 7% this year.
Chip shares fell hardest
The iShares Semiconductor ETF fell 12.15% on Thursday, while the equal-weighted S&P 500, in which every company counts the same, fell 2.89%. Reports tied the selling to doubts about the cost of financing the AI build-out and possible limits on data centre construction after Democrats’ midterm wins.
The gap is wider over the past month. From 7 October to Thursday’s close, the chip fund lost 32% and the Nasdaq 100 lost 14.5%, while the equal-weighted S&P 500 rose 3%, the FTSE 100 rose 3.1% and India’s Nifty 50 rose 8.6%. The chip fund is still up 31% on the year.
Stock markets in South Korea and Japan, which have large weightings in chip and AI-related companies, were hit too. Both fell more than 6% in early trading on Friday, and Korean trading was halted for 20 minutes after the Kospi index dropped more than 8%.
If you hold a global fund priced at the London close, its Thursday valuation may not show all of the fall, because London closes four and a half hours before New York.
What happened after similar days
Treating falls of this size less than three months apart as one episode, there were 15 before Thursday. In 11 of them, the index ended the first day more than 10% below its high. In ten, no fall as large followed in the next three months. In the other five, including 2008 and 2020, more did.
A year after the first day, the S&P 500 was higher in ten of the 15 episodes. Picking any day since 1950 would have given a higher share, about 75%, so a bad day on its own has been no signal to buy. The lowest point during that year was typically about 8% below the first day’s close, and in five episodes it was more than 18% below. The table shows the last six.
| First day | Fall that day | Below record high at that close | Lowest in next 252 trading days | After 252 trading days |
|---|---|---|---|---|
| 14 Apr 2000 | -5.83% | -11.2% | -18.7% | -12.1% |
| 17 Sep 2001 | -4.92% | -32.0% | -23.2% | -15.9% |
| 15 Sep 2008 | -4.71% | -23.8% | -43.3% | -11.7% |
| 4 Aug 2011 | -4.78% | -23.3% | -8.4% | +15.9% |
| 27 Feb 2020 | -4.42% | -12.0% | -24.9% | +27.9% |
| 3 Apr 2025 | -4.84% | -12.2% | -7.7% | +22.6% |
| 5 Nov 2026 | -4.36% | -5.95% | Not known | Not known |
S&P 500 closing prices, excluding dividends. Lowest point and later return are measured from the first day's close.
The closest comparisons with Thursday are 1955, 1986 and 1989, when the first day also ended within 8% of a record. The further fall in the following year was 11.4% at most, though three examples are too few to build a rule on.
How borrowed money spreads a fall
Some investors buy shares with money borrowed from their broker, known as margin debt, with the investments as security. If prices fall far enough, the broker demands more cash or sells the holdings, often without warning. That demand is a margin call. The sales push prices lower, which can trigger calls on other borrowers.
Customers of US brokers owed $1.48 trillion of margin debt in September, the latest figure, up 31% in a year and just below June’s record. They held about 29 cents of free cash for every dollar borrowed, against 46 cents in October 2021, so they have less cash available to meet calls.
What you hold decides how close you are. Suppose you borrow half the cost and your broker requires you to keep 30% of the account as your own money. You get a call after a fall of about 29%. The S&P 500 is nowhere near that, but anyone who bought the chip fund that way on 7 October is already past it.
The two largest monthly percentage falls in margin debt in the figures from FINRA, the US brokerage regulator, since 1997 were October and November 2008. Debt fell 34% over those two months while the S&P 500 fell 23%, though some of that was voluntary repayment.
Leveraged funds are forced sellers on any down day. A fund aiming for three times the daily return of an index resets its exposure each day, so after a 5% fall in the index it has to cut exposure by the equivalent of 30% of its assets at the start of that day, usually near the close. Nomura, the Japanese investment bank, expected such funds to sell about $47 billion into Thursday’s close, the second-largest amount in its data since 2006. More than $7 billion went into SOXL, a three-times fund on the same index as the iShares fund, during October as it fell. Since 6 October the iShares fund is down about a third and SOXL about 75%.
South Korea had a version of this earlier in 2026. Its regulator reported forced selling in June running at about seven times the daily pace of late 2025. Margin loans fell 11% in three weeks from their June record, and in July the authorities suspended new listings of single-stock leveraged funds.
How much of Thursday’s fall was forced is unknown. Nomura’s figure is an estimate made before the close, and monthly margin debt figures cannot isolate one day. The size of the debt also needs care, because in the second quarter it was 2.3% of the S&P 500’s value, in line with its average since 1997, and some earlier surges in borrowing were followed by gains.
Some investors buy shares with money borrowed from their broker, known as margin debt, with the investments as security. If prices fall far enough, the broker demands more cash or sells the holdings, often without warning. That demand is a margin call. The sales push prices lower, which can trigger calls on other borrowers.
Customers of US brokers owed $1.48 trillion of margin debt in September, the latest figure, up 31% in a year and just below June’s record. They held about 29 cents of free cash for every dollar borrowed, against 46 cents in October 2021, so they have less cash available to meet calls.
What you hold decides how close you are. Suppose you borrow half the cost and your broker requires you to keep 30% of the account as your own money. You get a call after a fall of about 29%. The S&P 500 is nowhere near that, but anyone who bought the chip fund that way on 7 October is already past it.
The two largest monthly percentage falls in margin debt in the figures from FINRA, the US brokerage regulator, since 1997 were October and November 2008. Debt fell 34% over those two months while the S&P 500 fell 23%, though some of that was voluntary repayment.
Leveraged funds are forced sellers on any down day. A fund aiming for three times the daily return of an index resets its exposure each day, so after a 5% fall in the index it has to cut exposure by the equivalent of 30% of its assets at the start of that day, usually near the close. Nomura, the Japanese investment bank, expected such funds to sell about $47 billion into Thursday’s close, the second-largest amount in its data since 2006. More than $7 billion went into SOXL, a three-times fund on the same index as the iShares fund, during October as it fell. Since 6 October the iShares fund is down about a third and SOXL about 75%.
South Korea had a version of this earlier in 2026. Its regulator reported forced selling in June running at about seven times the daily pace of late 2025. Margin loans fell 11% in three weeks from their June record, and in July the authorities suspended new listings of single-stock leveraged funds.
How much of Thursday’s fall was forced is unknown. Nomura’s figure is an estimate made before the close, and monthly margin debt figures cannot isolate one day. The size of the debt also needs care, because in the second quarter it was 2.3% of the S&P 500’s value, in line with its average since 1997, and some earlier surges in borrowing were followed by gains.
How to avoid being a forced seller
Few of our readers hold a three-times chip fund. Portfolio loans, where a bank or broker lends against your investments, are a more likely route for expats, but we never recommend investing that way, as leverage is a very quick route to being poor! The terms can also change in a fall. In March 2020 some wealth managers in Asia cut what they would lend from 60-70% of a portfolio’s value to 40-50% and asked clients for more collateral. Loan terms can also allow the bank to sell without further notice if a call is not met, and a loan in one currency against assets in another adds the exchange rate to the risk.
You can also be a forced seller with no loan at all. A property purchase or school fees paid from invested money set a date for selling whatever the market is doing, and so does retirement income drawn with no cash set aside.
The way out is to hold cash or other low-risk assets for bills you know are coming, so nothing has to be sold at a bad time. Cashflow modelling is at the core of every plan we build, and it shows how much to set aside.
If you have borrowed against your investments, or are unsure what would have to be sold in a longer fall, we can go through it with you. You can book an initial call below.
Past performance does not predict future returns.
Few of our readers hold a three-times chip fund. Portfolio loans, where a bank or broker lends against your investments, are a more likely route for expats, but we never recommend investing that way, as leverage is a very quick route to being poor! The terms can also change in a fall. In March 2020 some wealth managers in Asia cut what they would lend from 60-70% of a portfolio’s value to 40-50% and asked clients for more collateral. Loan terms can also allow the bank to sell without further notice if a call is not met, and a loan in one currency against assets in another adds the exchange rate to the risk.
You can also be a forced seller with no loan at all. A property purchase or school fees paid from invested money set a date for selling whatever the market is doing, and so does retirement income drawn with no cash set aside.
The way out is to hold cash or other low-risk assets for bills you know are coming, so nothing has to be sold at a bad time. Cashflow modelling is at the core of every plan we build, and it shows how much to set aside.
If you have borrowed against your investments, or are unsure what would have to be sold in a longer fall, we can go through it with you. You can book an initial call below.
Past performance does not predict future returns.
