S&P 500 Is Up 12% in 2026 But a 1907 Crash Signal Is Back

The S&P 500 has gained 12.65% in 2026 and closed Friday at 7,711.75. A Wall Street Journal column argues the closest match for in the present day’s buying and selling frenzy will not be 1999. It is 1901.

That growth ended in the Panic of 1907, with columnist Jason Zweig arguing the hazard was by no means costly shares. It was borrowed cash and buying and selling that felt like playing.

The Numbers That Rhyme With 1901

Zweig leans on one determine, the New York Stock Exchange (NYSE) turnover reached 319% in 1901. The total market modified fingers roughly each 4 months.

Today in 1901, the yearly NYSE turnover hits document 319% displaying short-term investing isnt new, as buyers held shares for avg of 15 wks

— MoAF (@FinanceMuseum) December 31, 2010

Bucket outlets equipped the remainder, letting small clients wager, at heavy leverage, on whether or not a inventory would tick up or down. No shares ever modified homeowners. That wager is recognizable in the present market.

Same-day choices made up 66.2% of all S&P 500 choices quantity in July, an all-time high, Cboe reported. Prediction market platforms widened their catalogues again, from token costs to sporting-event phrases.

Borrowing has additionally stored tempo, with margin debt reaching $1.42 trillion in July, in accordance with Financial Industry Regulatory Authority (FINRA) filings. A 12 months earlier the determine was $1.02 trillion.

BREAKING: US margin debt dropped -$85 billion in July, to $1.42 trillion, the most important month-to-month decline on document.

This additionally marks the primary month-to-month lower since March.

By comparability, the 2nd-biggest month-to-month drop was recorded in January 2022 at -$80 billion, simply because the bear… pic.twitter.com/scrhStGdJd

— The Kobeissi Letter (@KobeissiLetter) August 18, 2026

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1907 Broke on Liquidity, Not Valuation

The set off regarded small, the place two speculators didn’t nook United Copper inventory in October 1907. The harm adopted, with runs hitting belief corporations, evenly regulated lenders that stored about 5% of deposits in money. National banks stored 25%.

Wall Street collapsed in October 1907 not as a result of banks ran out of cash, however as a result of the shadow banking system had no lender of final resort.

It began with a failed nook on United Copper inventory by F. Augustus Heinze and Charles W. Morse. When the nook collapsed, the margin… pic.twitter.com/I1jEatIeJi

— MD (@MDKASHIF_9) August 21, 2026

Then cash vanished. Call cash charges ran from 9.5% to 70%, and to 100% two days later. J.P. Morgan hauled money to the change mortgage publish to maintain buying and selling alive. Congress created the Federal Reserve six years later.

The Dow misplaced 40.9% from its December 1906 peak to the November 1907 backside, a National Bureau of Economic Research study discovered.

Valuation drives most earlier bubble comparisons. The Shiller price-to-earnings ratio sits close to 42, in opposition to a long-run common of 17.4, and slightly below its December 1999 document. Zweig’s warning is quieter and more durable to hedge.

Crypto shares the identical funding pipes. Bitcoin (BTC) trades near $78,618 and has tracked the S&P 500 by previous danger shocks.

Cash appears to be like like useless weight whereas markets climb. It turns into leverage the second all people else wants it.

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