2008 Stock Market Crash: How Long Did It Take to Recover?

It took the S&P 500 five and a half years to recover from the 2008 crash by price: from its October 9, 2007 record of 1,565.15 to its first close above it on March 28, 2013. It closed at or below the record one last time on April 22, 2013, and has stayed above it since. Start the count at the March 9, 2009 low instead and the same recovery took four years.

Count the dividends, the cash many companies pay their shareholders, and the wait drops to about four and a half years. The S&P 500's total-return index, which assumes every dividend is reinvested at no cost, first closed above its October 2007 level on April 2, 2012. SPY, the best-known fund that tracks the index, got there on August 16, 2012, after four years and ten months. The two got back months apart: a fund pays small fees and handles dividends a little differently from the index, and that small gap was enough to move the date. Both dividend measures dipped back below one last time in late November 2012 and have stayed above since.

Inflation pushes the date back out. Prices of everyday things rose about 12% between October 2007 and late 2013, so getting back to the same number of dollars was not the same as getting back the same buying power. Adjusted for that (a real return), the S&P 500 by price got back in about October 2013, six years after the peak. Counting SPY's dividends too, it got back in about March 2013: the dividends roughly made up for the inflation.

The clock can also start later. Lehman Brothers, a large Wall Street investment bank, filed for bankruptcy on September 15, 2008, and the S&P 500 closed at 1,192.70 that day. It slipped back and forth around that level for about two weeks, then fell far below it. After the March 2009 low, it did not close above 1,192.70 again until April 9, 2010, about 19 months after Lehman failed. It dipped below again in 2010 and 2011, the last time on November 28, 2011.

From its record close to its low, the S&P 500 dropped 56.8% in the 2008 crash and the Dow 53.8%. The Nasdaq Composite fell 55.6% from its October 2007 high (its record dated from 2000). All three reached their lowest close on the same day, March 9, 2009. In dollars, $10,000 that tracked the S&P 500 from its record was worth $4,322 at the low, before dividends.

The often-quoted figure for 2008 itself is smaller, because a calendar year starts and ends on arbitrary days. From the last close of 2007 (1,468.36) to the last close of 2008 (903.25), the S&P 500 fell 38.5% by price, or about 37% with dividends reinvested. The fall then kept going into 2009. The chart after the table follows the S&P 500 week by week, from the record to the day it got back.

Measured from the market's peak, the 2008 stock market crash started in October 2007, almost a year before Lehman Brothers failed. The S&P 500 set its record on October 9, 2007, and by July 9, 2008 it had closed 20% below it, the usual line for a bear market. In March 2008, Bear Stearns, another Wall Street investment bank, had agreed to be sold to JPMorgan Chase in a rescue backed by the Federal Reserve.

The timeline below runs from that record to the day prices got all the way back, five and a half years later. The coral half is the fall; the green half is the climb back.

The fall took 17 months, and the fastest part came in its last six. On Monday, September 15, 2008, Lehman Brothers filed for bankruptcy and the S&P 500 fell 4.7%. From that day's close to the March 2009 low it lost another 43%. The economy was in recession for most of that time: the National Bureau of Economic Research later dated the recession from December 2007 to June 2009. The bottom for stocks came on March 9, 2009, three months before the recession's end.

Yes, though the closes cannot show whether the rescues made it worse or stopped something worse. After a bank rescue of up to $700 billion became law on October 3, 2008, the S&P 500 fell another 38%, to its March 2009 low. By October 3 it was already 30% below its record. On September 29, 2008 the House had voted down the first version of the rescue, 228 to 205, and the S&P 500 fell 8.81%. A revised version passed, and on October 3, the day it became law, the index closed at 1,099.23. On October 8 the Federal Reserve and five other central banks cut interest rates together. The next day the S&P 500 closed at 909.92, 17% below its October 3 close. Four of the five worst days, and the March 2009 low, came after the rescue became law.

Whether the rescues helped is a question the closes cannot answer, since 2008 happened only once, with them. The closes do record what owning stocks was like that winter. Rescues arrived and sharp rallies came and went, and the low still came five months after the law passed. Our 2008 stock market crash simulator walks you through those weeks one headline at a time.

If you added money every month, as many workplace retirement plans do, you got back above your own deposits long before a lump sum invested at the peak did. Take $100 put into an S&P 500 index fund (SPY) on the first trading day of each month from October 2007, bought at that day's closing price in fractional shares, with dividends reinvested. In percentage terms the worst point came on November 20, 2008, when $1,400 of deposits was worth $804, 43% under what had gone in. By September 16, 2009, six months after the market's low, the account had climbed back over its deposits, and from September 2010 it stayed above them, though only just in October 2011. The lump sum invested at the October 2007 peak needed until August 2012.

The chart follows both, each measured against the money that went into it. Above the dashed line, an account was worth more than had been paid in.

The green line got back almost three years before the blue one. Deposits made after prices fell bought more fund shares for the same $100, so the account needed a smaller rebound to break even. Investing a fixed amount on a schedule like this is called dollar-cost averaging. The comparison is about break-even dates, not about which approach ended with more money: the monthly saver also had far less in the market when it fell. The count is in dollars only and leaves out the inflation the table above adjusts for. It assumes a fixed $100 a month, with the fund's own fees but no taxes. It also depended on the S&P 500 coming back; in a market that stayed down, the result would have been different. Our DCA vs lump sum calculator runs the same test with your own amounts. Past performance does not guarantee future results.

Congress set up the Financial Crisis Inquiry Commission to examine the causes of the 2008 financial crisis, and its members could not agree on one. Its report came out in January 2011. Its six-member majority blamed failures of financial regulation and supervision, failures of risk management at big firms, too much borrowing (known as leverage), collapsing mortgage-lending standards, the credit rating agencies, and the complex bonds and contracts built on those loans. Three commissioners, Keith Hennessey, Douglas Holtz-Eakin and Bill Thomas, wrote a joint dissent that listed ten causes and stressed the global spread of a credit and housing bubble. A fourth, Peter Wallison, wrote his own dissent naming government housing policy as the main cause.

The mechanics are easier to agree on. They ran as a chain, each step setting off the next.

It started with the loans. Mortgage lending standards had weakened, and many US home loans only worked if house prices kept rising or the loan could be refinanced, which became impossible once prices fell. Banks around the world held bonds built from those loans, often with borrowed money. When the bonds fell in value, lenders stopped trusting each other, and money for short-term loans dried up (a loss of liquidity). That is why the failure of one Wall Street investment bank spilled into lending, jobs and stock prices far beyond Wall Street. Our post on whether the housing market is crashing in 2026 compares today's mortgages with those of 2006.

• S&P 500, daily closes: Yahoo Finance (^GSPC), checked against StatMuse's daily tables.
• S&P 500 with dividends: the S&P 500 total-return index (Yahoo Finance, ^SP500TR), checked against the dividend-adjusted closes of an index fund that tracks it (VFIAX); SPY dividend-adjusted closes from Yahoo Finance, checked against StatMuse and against IVV.
• Dow Jones Industrial Average: Yahoo Finance (^DJI), checked against StatMuse.
• Nasdaq Composite: FRED series NASDAQCOM, checked against Yahoo Finance (^IXIC).
• Inflation: the consumer price index for all urban consumers, not seasonally adjusted (FRED CPIAUCNS), applied by month.
• The House vote: roll call 674, September 29, 2008.
• The joint rate cut: Federal Reserve press release, October 8, 2008.
• The recession: NBER business cycle dates.
• Causes: The Financial Crisis Inquiry Report, January 2011: the majority's conclusions, the Hennessey, Holtz-Eakin and Thomas dissent and Peter Wallison's dissent.

Method. Data checked through October 30, 2026. "Recovered" means a closing price above the level being regained, the October 2007 record unless a row says otherwise. It does not mean investors felt whole, kept their purchasing power or avoided taxes and fees. Durations are counted from the starting date in each row and rounded to the nearest month. Figures are price only unless they say dividends. This page is historical education, not investment advice. Historical data shown; past performance does not indicate future results.

Every post in this series measures crashes the same way; our market-history method explains how.