Margin debt plunges 30%

Margin debt has fallen more than 30% from its October ’21 peak. That is a similar range to the 2020 contraction, during the pandemic, but far behind the +50% contractions seen during the Dotcom crash (2000-2002) and the global financial crisis (2007-2009).

S&P 500 & Margin Debt

The S&P fell 49% during the Dotcom crash and 57% during the GFC. The low point in June showed a 24% fall, from the January peak, followed by a 7.5% rally.

S&P 500


Plunging margin debt confirms a bear market, in line with the Fed’s plan to force deleveraging in order to shrink aggregate demand and curb inflation.

The current rally on the S&P 500 is typical of a reflexive rally in the middle of a bear market. We expect further contraction in margin debt as interest rates rise and liquidity tightens. Our target is a 50% contraction in margin debt, with a similar fall in the S&P 500, to 2400.


  • Hat tip to Advisor Perspectives for the margin debt chart
  • FINRA for the margin debt data