Largest Moves in S&P 500 Index, 1988-2025

In exhibit 11, we update this analysis for the S&P 500, an index of the largest U.S. public companies, from 1988 to 2025. Consistent with past research, plausible reasons support some of the big moves, but others defy simple explanation (e.g., “Late rally on Wall Street as rebound in stocks defies latest economic news.”). This line of research makes clear that changes in asset prices have fundamental and behavioral sources.

Behavioral influences are not just relevant for U.S. stocks but for nearly all markets.85 For example, bubbles and crashes have occurred across geographies and asset classes. There is even evidence that we share some of these behavioral issues with other primates. Experiments show that capuchin monkeys exhibit loss aversion, the tendency to suffer more from losses than enjoy gains of a similar size.86