How The Markets Reacted To 13 Mega Disasters In US History

pearl harborPearl Harbor

Between two world wars, multiple natural disasters and a major terrorist attack, the U.S. has been to hell and back…and back again.Yet each time, the markets eventually regained their footing.

To be sure, in many cases, it took a while.

We asked S&P Dow Jones Indices to send us the complete returns for the Dow Jones Industrial Average and S&P 500 since their respective inceptions to see how markets reacted to major cataclysms.

What’s most surprising are the events that did not produce major market collapses.

Hurricane Camille, the attempted assassination of Ronald Reagan, the Martin Luther King riots — the markets reacted with nary a shrug to each. 

Our conclusion: the markets are often down — but never out.

*One caveat, we picked events where returns clearly changed after the date of the event, but other factors and happenings may have contributed to prolonging losses.

Sinking of the USS Maine at Havana Harbor

Date: Feb. 15, 1898

DJIA Index prior to event: 50.04 points

Days until loss recaptured: 68

S&P 500 Index prior to event: n/a

Days until loss recaptured: n/a

Comment: The USS Maine, a second-class battleship stationed in the then-American protectorate of Cuba, was mysteriously destroyed the night of Feb. 15. The event triggered the launch of the Spanish-American War several weeks later.

Source: S&P Dow Jones Indices

Assassination of President William McKinley

Date: Sept. 6, 1901

DJIA Index prior to event: 73.06 points

Time until loss recaptured: 2 years, 3 months

S&P 500 Index prior to event: n/a

Days until loss recaptured: n/a

Comment: McKinley had won a second term for President a year earlier. His assassination triggered a wave of anti-immigrant and anti-anarchist crackdowns. The impact of his death on the market was protracted by the Banking Panic of 1901.

Source: S&P Dow Jones Indices

1906 San Francisco Earthquake

Date: Sept. 6, 1901

DJIA Index prior to event: 73.06 points

Time until loss recaptured: 2 years, 3 months

S&P 500 Index prior to event: n/a

Days until loss recaptured: n/a

Comment: McKinley had won a second term for President a year earlier. His assassination triggered a wave of anti-immigrant and anti-anarchist crackdowns. The impact of his death on the market was protracted by the Banking Panic of 1901.

Source: S&P Dow Jones Indices

Germany declares war on Russia (World War I begins)

Date: August 1, 1914

DJIA Index prior to event: 71.42 points

Days until loss recaptured: 115 days*

S&P 500 Index prior to event: n/a

Days until loss recaptured: n/a

Comment: A tit-for-tat between Germany and Russia that began with the assassination of Archduke Franz Ferdinand several months earlier culminated in Germany's opening hostilities on its eastern front.

Source: S&P Dow Jones Indices

*Data missing between July and December 1914

Sinking of the Lusitania

Date: May 7, 1915

DJIA Index prior to event: 65.13 points

Days until loss recaptured: 21 days

S&P 500 Index prior to event: n/a

Days until loss recaptured: n/a

Comment: On May 7, the RMS Lusitania, a British ocean liner sailing from New York City to Ireland was sunk by a German submarine. 1,198 people were killed.

Source: S&P Dow Jones Indices

The U.S. declares war on Germany

Date: April 2, 1917

DJIA Index prior to event: 97.06 points

Days until loss recaptured: 46 days

S&P 500 Index prior to event: n/a

Days until loss recaptured: n/a

Comment: President Woodrow Wilson had campaigned for his second term on the slogan, 'He kept us out of war.' But after his administration caught wind that Germany was goading Mexico to begin hostilities with America, Wilson changed his mind.

Source: S&P Dow Jones Indices

Attack on Pearl Harbor

Date: Dec. 7, 1941

DJIA Index prior to event: 116.6 points

Days until loss recaptured: 309 days

S&P 500 Index prior to event: 9.32 points

Days until loss recaptured: 218 days

Comment: 2,402 people, including 57 civilians, were killed when Japanese fighter jets attacked the U.S. naval base in Oahu.

Source: S&P Dow Jones Indices

Bay of Pigs disaster

Date: April 17-April 22

DJIA Index prior to event: 685.26 points

Days until loss recaptured: 8 days

S&P 500 Index prior to event: 65.77 points

Days until loss recaptured: 7 days

Comment: On April 17, the CIA attempted to overthrow the Communist regime in Cuba. The mission failed, resulting in a total of 294 total deaths and 1,202 Americans and Cuban exiles taken prisoner.

Source: S&P Dow Jones Indices

Cuban Missile Crisis

Date: October 14 - 28, 1962

DJIA Index prior to event: 587.68 points

Days until loss recaptured: 11 days

S&P 500 Index prior to event: 57.27 points

Days until loss recaptured: 14 days

Comment: For 13 days, Americans faced the threat of going to war with the USSR over the latter country's decision to place missile silos in Cuba. The day after President Kennedy addressed the nation on October 22, the markets hit their lowest point in years.

Source: S&P Dow Jones Indices

JFK assassination

Date: Nov. 22, 1963

DJIA Index prior to event: 732.65 points

Days until loss recaptured: 1 day

S&P 500 Index prior to event: 71.62 points

Days until loss recaptured: 1 day

Comment: This was almost certainly the first major historical event that caused real-time disruption in the markets, as TV news networks across the country reported live updates from Dallas.

Source: S&P Dow Jones Indices

Re-Institution of the conscription draft

Date: Dec. 1, 1969

DJIA Index prior to event: 812.30 points

Days until loss recaptured: 258 days

S&P 500 Index prior to event: 93.81 points

Days until loss recaptured: 290 days

Comment: The draft to conscript American men aged 18 to 24 into the Vietnam war lasted for three years.

Source: S&P Dow Jones Indices

U.S. Embassy in Tehran taken hostage

Date: Nov. 4, 1979

DJIA Index prior to event: 812.63 points

Days until loss recaptured: 6 days

S&P 500 Index prior to event: 102.51 points

Days until loss recaptured: 6 days

Comment: The embassy was seized in the wake of the Iranian Revolution that saw the Shah regime overthrown. The crisis lasted 444 days, and to this day the U.S. does not maintain formal ties with the country.

Source: S&P Dow Jones Indices

The 9/11 attacks

Date: Sept. 11, 2001

DJIA Index prior to event: 9605.50 points

Days until loss recaptured: 13 days

S&P 500 Index prior to event: 1092.54 points

Days until loss recaptured: 19 days*

Comment: Markets were closed for the rest of the week after the attacks.

Source: S&P Dow Jones Indices

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