Stock Market Crash 2026: How Close It Is, What Past Crashes Show and What You Can Do Now

A stock market crash in the strict sense has not arrived in 2026, but a sharp correction is under way on the Nasdaq. The Nasdaq 100 closed at 26,630 points on Thursday, November 5, 14.7 percent below its October 6 record, and lost 6.4 percent on that day alone. The S&P 500 is 5.9 percent below its high, the DAX just 0.9 percent. Crypto is hit hardest: Bitcoin (BTC) stands 39.6 percent below its all-time high.

Here you will find when experts speak of a correction, a bear market and a crash, how close markets are to that threshold, what the big crashes since 1929 show and what you can sensibly do now. Why Bitcoin is falling right now is covered on an ongoing basis in our overview of why cryptocurrencies are falling.

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What is a stock market crash, and when does it become a bear market?

A stock market crash is a very sharp fall in prices in a short time, usually within days or a few weeks. There is no fixed percentage threshold for it. For the two preliminary stages, however, rules of thumb have become established on the market, measured from the last record:

• Correction: from 10 percent below the high. Corrections happen several times in most decades.
• Bear market: from 20 percent below the high. The term describes a longer phase of falling prices, not a single day. How long bear markets lasted in stocks and Bitcoin is shown in our guide to bear markets.
• Crash: a slump that stands out in speed and depth. The textbook example is October 19, 1987, when the S&P 500 lost 20.5 percent in a single day.

By these rules, the Nasdaq Composite is in a correction at 11.9 percent below its high, the Nasdaq 100 is approaching the bear market threshold at 14.7 percent, and Bitcoin crossed it long ago at almost 40 percent.

How close is the 2026 stock market crash? Where things stood on November 6

That depends on where you look. The correction mainly hits US technology stocks; Europe is holding up so far. Closing prices on November 5 compared with each index's record close of the past two years:

The table is based on daily closing prices from Yahoo Finance and, for Bitcoin, CoinGecko in the early hours of November 6.

Why are stock prices falling so sharply right now?

Because the AI and chip trade is unravelling. After the midterms, investors sold exactly the stocks that had carried the rally since the spring, and because the Nasdaq 100 is heavily concentrated in a few large technology groups, it is falling twice as fast as the broad market. The details of Thursday are in our analysis of the Nasdaq crash.

Three factors add to the pressure:

• Oil: Brent rose 4.7 percent in the 24 hours to 11 p.m. UTC on Thursday, to $99.24 a barrel. Expensive energy keeps inflation high and limits central banks' room for manoeuvre.
• Interest rates: The US Federal Reserve raised its key rate to 3.75 to 4.00 percent in September and held it on October 28, with two members voting for a further increase, according to the Fed statement. High valuations and rising rates do not mix well.
• Politics: The Democrats take over both chambers of Congress in January, and Trump's announced deal with Russia brought no relief because details are lacking.

Whether this turns into an AI bubble that bursts is a scenario we already played through in June; the piece on the AI bubble and its consequences for Bitcoin now carries the November 6 update.

What past stock market crashes show

Above all two things: depth varies enormously, and the time to a new high varies even more. The table shows the big slumps, calculated from daily closing prices of the S&P 500 and the Nasdaq Composite, each from the last high to the low and to the first close above the old high:

The causes of the biggest stock market crashes

Each big stock market crash had a different trigger, but the underlying pattern is often the same: investors pay prices that are too high on credit, then sentiment turns, and forced selling accelerates the decline. A brief look at the events behind the table:

• 1929: Many investors had bought shares on credit. When prices fell in October 1929 they had to sell to cover loans, and the crash turned into the Great Depression with bank failures and mass unemployment.
• 1987: On Black Monday, computer-driven selling programs designed to hedge portfolios automatically when prices fell amplified the slump. The central bank then provided liquidity, and the economy did not slide into recession.
• 2000: Internet companies without profits were worth billions on the stock market. When money for new funding dried up, the dotcom bubble burst and the Nasdaq lost almost four fifths of its value.
• 2007 to 2009: Bad US mortgage loans, packaged into securities, sat on banks' balance sheets. With the collapse of Lehman Brothers on September 15, 2008, this became a global financial crisis.
• 2020: The Covid pandemic and lockdowns made equity markets fall by a third in just 23 trading days. Central banks and governments provided trillions in support, and the recovery came faster than ever before.
• 2022: The highest inflation in decades forced central banks into rapid rate hikes. Highly valued technology stocks and cryptocurrencies were hit hardest.

For 2026, the dotcom bubble is the comparison many draw, because then as now technology stocks dominated the market. The difference lies in profits: whether the big AI groups earn back their investment in data centres will decide whether 2026 plays out more like 2000 or like 2020. That is worth watching with every set of quarterly results, more than any headline.

What does Bitcoin do in a stock market crash?

So far Bitcoin has fallen along with stocks in a crash, often even harder. On November 5 Bitcoin lost 6.2 percent in 24 hours, almost as much as Nasdaq 100 futures at 6.9 percent. In the Covid crash, Bitcoin fell 39.5 percent in a single day on March 12, 2020, measured by the closing price on Binance. Bitcoin's own bear markets were deeper than almost any stock market crash: down 83.2 percent to December 2018 and down 76.6 percent to November 2022, with the new high coming after 35 and 28 months respectively.

The reason is liquidity. When investors have to cover losses or service loans on the stock market, they sell whatever can be sold around the clock, and Bitcoin trades at night and at weekends too. How deep it can go and which levels matter now is set out in our analysis of the Bitcoin crash.

What you can do in a stock market crash

The most important decision comes before the sell button. These five points help you stay calm without betting on a direction:

1. Check your reserve: Money you need in the next two years does not belong in stocks or crypto. If you have that reserve, you do not have to sell in a crash.
2. Keep savings plans running: A savings plan automatically buys more units when prices fall. After the crashes of 2020 and 2022, exactly that captured the recovery.
3. Use diversification: The gap between the Nasdaq 100 and the DAX shows what diversifying across regions and sectors achieves. If you hold only US technology, you carry the full concentration risk.
4. Know your leverage: If you trade with leverage, you should know at which price a position will be forcibly closed. How hedging with short positions works is explained in our guide to shorting in falling markets.
5. Consider tax: In Germany, gains on shares are subject to withholding tax, and losses on shares can only be offset against gains on shares. With crypto, a gain is tax-free after a holding period of one year; if you sell earlier and reach gains of 1,000 euros or more in the year, you pay your personal tax rate on the entire gain. What a sale costs is shown by the CryptoTicker tax calculator.

If you want to buy into the pullback, you will find providers for stocks and crypto in our comparison of the best crypto brokers and all the ways to buy Bitcoin. Larger crypto amounts belong on a device from our hardware wallet comparison.

Typical mistakes in a stock market crash: panic, stop-loss and timing

The biggest losses in a crash often come not from the decline itself but from decisions driven by fear. We see three mistakes in every crisis:

• Selling at the bottom: Selling after a 30 percent slump makes the loss final. The table above shows that the broad market has so far recovered from every crash, even if that sometimes took years.
• Setting a stop-loss badly: A stop-loss is an order that automatically sells a position once a price is reached. In a crash, however, prices often jump past the level, and the sale is executed well below the plan. If you use a stop-loss, set it at a distance from round numbers and be aware that it does not protect you in price gaps.
• Trying to guess the bottom: Nobody reliably hits the lowest point. A strategy that buys in instalments over weeks takes this decision off your hands and spreads the risk over several prices.

For investing, that means a portfolio that matches your time horizon is the best protection. If you will not need your money for ten years, you can sit out a crash and use it through savings plans. If you need it in a year, you should not hold it in stocks or crypto in the first place.

How likely is a stock market crash in 2026?

A crash cannot be predicted, but how nervous the market is can be measured. Three figures show whether the correction is turning into something more:

• The distance from the high: If the S&P 500 falls more than 20 percent below its high of 7,818.93 points, that is below roughly 6,255 points, the broad US market is in a bear market.
• The VIX fear gauge: It rose from 16.6 to 28.2 points on November 5. During the tariff shock in April 2025 it closed at 52.3 points.
• AI groups' profits: As long as revenue and profits support the investment, a pullback remains a pullback.

Our assessment: the situation is serious for the technology sector, but not yet for the broad market. If you hold the German market in your portfolio, the DAX is close to its record. The dates that matter now and the latest state of play are in our analyses, which we update with every big move.

As of November 6, 2026, 2 a.m. This article is not investment or tax advice; stocks and crypto assets can lose a great deal of value.