Market History Bush Era Market Guide

Bush Terms, Post Dotcom / Pre-Recession (11/2002-11/2007)

Track SPY volatility between the dotcom aftermath and the lead-up to the Great Recession, including Iraq War headlines, Federal Reserve policy, credit market stress, oil shocks, and early recession warning signs.

Section: Market Overviews Period: 11/2002-11/2007 Published: 2026-03-07 Updated: 2026-03-07

Bush Terms, Post Dotcom/Pre-Recession, (11/2002-11/2007)

SPY Up Days
Nov 27, 2002: +2.80%	Dec 16, 2002: +2.35%	Mar 17, 2003: +3.54%	Mar 13, 2003: +3.44%
Jan 02, 2003: +3.32%	Apr 02, 2003: +2.61%	Mar 21, 2003: +2.30%	Jan 06, 2003: +2.25%
Jun 16, 2003: +2.24%	Oct 01, 2003: +2.23%	Nov 21, 2002: +2.16%	Apr 22, 2003: +2.17%
Jun 29, 2006: +2.16%	Aug 06, 2007: +2.41%	Aug 17, 2007: +2.45%	Aug 29, 2007: +2.19%
Jun 15, 2006: +2.13%

SPY Down Days
Nov 07, 2002: -2.29%	Nov 11, 2002: -2.07%	Mar 24, 2003: -3.53%	Feb 27, 2007: -3.48%
Aug 09, 2007: -2.96%	Nov 07, 2007: -2.94%	Aug 03, 2007: -2.66%	Nov 01, 2007: -2.65%
Mar 10, 2003: -2.58%	Nov 26, 2002: -2.10%	May 19, 2003: -2.49%	Aug 28, 2007: -2.35%
Nov 26, 2007: -2.33%	Jul 26, 2007: -2.33%	Jan 30, 2003: -2.29%	Dec 09, 2002: -2.21%
Jan 24, 2003: -2.92%

Summary

All things considered, the interim period between the Dotcom Bubble and Recession were fairly mild. 2004 and 2005 saw a complete break in volatile days, and the ones leading up to it were residual from the Dotcom bubble or related to the war in Iraq, which wrapped up quickly. 2006 had only one instance as well, as the bull market leading to eventual disaster seems to have been kicking off full throttle. It wasn’t until 2007 that it truly returned, and by then, the writing was on the wall for one of the most severe downturns in recent history.

Key Data to Keep Track of:

Earnings reports

Actively monitoring wars

State of credit markets and liquidity

FED announcements and comments

Oil prices

2002

November: Nov 7th (-2.29%), Nov 11th (-2.07%), Nov 21st (+2.16%), Nov 26th (-2.10%), Nov 27th (+2.80%)

Another set of weak earnings expectations from Cisco triggered a broad market sell‑off on 11/07. Then on 11/11, markets broke down again amid mounting concerns about a potential war in Iraq, and profit‑taking after the previous few weeks’ upturn was also cited. 11/21 saw the NASDAQ return to its highest level in the past five months. Hewlett Packard saw an earnings beat, a recent rate cut, and a bullish sentiment returned for tech stocks in general. 11/26 saw yet another poor consumer confidence report coming out from the government, sending prices down again. 11/27 saw positive durable good reports come out, sending most of the SPY and DOW up substantially.

December: Dec 9th (-2.21%), Dec 16th (+2.35%)

12/09 broke out with bankruptcy proceedings from United Airlines, IBM was hit with a downgrade, a former exec of CSX was appointed Treasury secretary, and general concerns of a poor economy negatively impacting corporate profits prevailed. Following two weeks of overall decline, 12/16 saw the entrance of bargain hunters, taking advantage of depressed market conditions.

2003

January: Jan 2nd (+3.32%), Jan 6th (+2.25%), Jan 24th (-2.92%), Jan 30th (-2.29%)

The second day of the new year opened with a stronger‑than‑expected manufacturing report, and a major settlement related to the Enron scandal helped lift markets. On 01/06, the markets jumped again after President Bush proposed a tax cut on dividends, sending the largest dividend‑paying stocks sharply higher. Then on 01/24, renewed threats of war with Iraq, which lacked broad support among U.S. allies, combined with weak forecasts from Microsoft, Intel, IBM, AT&T, and Eli Lilly to pressure the market. Most sectors in the market fell to their yearly lows. On January 30th, another recovery‑rally attempt broke down. The Commerce Department reported weak economic growth, but the primary source of anxiety appeared to be the planned war with Iraq

March: Mar 10th (-2.58%), Mar 13th (+3.44%), Mar 17th (+3.54%), Mar 2nd (+2.30%), Mar 24th (-3.53%)

March 10th saw continued anxiety about the state of the economy and war triggered more selling. It’s worth mentioning that mortgage rates approached 40 year lows, and drops in Treasury yields suggested they would go even lower.Markets experience a huge surge of optimism on 03/13 thanks to the US agreeing to delay a vote to forcefully disarm Iraq at the UN. 03/17 was rather strange, as the market positively reacted to news that the government had decided to end diplomatic attempts at handling Iraq and instead committed to war. Now that the shadow of doubt was cleared, Wall Street was willing to play ball. 03/21 saw the market completely embracing active war with Iraq, which seems to suggest that investors were optimistic that things would work out well for the American war effort. 03/24 saw an international drop in stock prices, as the fierce push towards Baghdad suggested that the war in Iraq may not end as quickly as presumed. Altria, formerly Phillip Morris, was also demanded to pay a $10 billion fine to smokers for claiming light cigarettes were less harmful than standard ones.

April: Apr 2nd (+2.61%), Apr 22nd (+2.17%)

04/02 saw the U.S. Army rapidly approaching Baghdad, which reignited hopes that the seizure of the city would see a rapid conclusion to the war. The NYT article noted that recent market changes were directly pegged to whether or not the war could quickly be resolved. 04/22 had seen the siege of Baghdad end nearly two weeks ago, and multiple insurance and drug makers met or exceeded earnings expectations. These included American International Group, Pfizer, and Eli Lilly.

May: May 19th (-2.49%)

05/19 saw reports of a change in government policy regarding the uninsured, suggesting that drugmakers would need to provide discounts for huge swaths of the population. In addition to this, Lowe’s posted a substantial earnings miss, suggesting that consumers weren’t pulling through with their spending.

June: Jun 16th (+2.24%)

June 16th saw a sharp wave of optimism return to the equity markets, driven by reports that factory activity and manufacturing demand were finally beginning to heal in a meaningful way. The improvement was reflected in the ISM Manufacturing Index — a widely watched gauge of industrial health that signals expansion above the 50 level — which had climbed from roughly 46.1 earlier in the year to about 49 by mid‑June. That momentum continued into early July, when the ISM reading reached 51 on 07/01/2003, reinforcing the view that the manufacturing cycle was turning upward after a prolonged slowdown

October: Oct 1st (+2.23%)

Another report on October 1st delivered a fresh burst of momentum. A huge boom in construction and manufacturing from the Institute of Supply Management. At this point, the ISM Manufacturing Index had climbed to 55.2 — a level consistent with broad‑based industrial expansion. This surge would ultimately begin a multi-year manufacturing and construction boom in America.

2006

June: Jun 15th (+2.13%), Jun 29th (+2.16%)

Leading up to 06/15, emerging markets had been hammered down due to over-valuation concerns and inflation concerns had seen the previous five weeks net a downturn. A comment from the FED Chair Bernanke alleviated concerns that high oil prices were set to negatively impact inflation, which he claimed was not the case. Two weeks later, on 06/29, the FED once again increased interest rates, but simultaneously suggested that concerns over inflation were exaggerated and that things were under control. This would seemingly imply that the rate hikes were temporary measures. At any rate, markets responded very positively to this news.

2007

February: Feb 27th (-3.48%)

02/27 saw one of the first significant selloffs leading up to the Great Recession. News came up from the Chinese government that improper financial actions were being taken by companies and financial firms, triggering sell-offs in markets across Asia. Once American markets got the news, they followed in lock step, which led to a crash across the general market.

July: Jul 26th (-2.33%)

7/26 saw another slide in prices. Exxon Mobil posted its first earnings decline in years, but the real reason seems to be concerns about access to cheap money, which was key for the gigantic leveraged buyouts that had become the norm by this point. Consumers would also have to face higher borrowing rates for new homes. It is interesting to note that Beazer, a huge homebuilder, was hit with a criminal investigation for arranged government-backed mortgages for buyers who should not have qualified for them. It was also reported that new home sales had begun to slump around this time.

August: Aug 3rd (-2.66%), Aug 6th (+2.41%), Aug 9th (-2.96%), Aug 17th (+2.45%), Aug 28th (-2.35%), Aug 29th (+2.19%)

By 08/03 it appears that volatility had returned to the stock market. Concerns about debts and mortgages were made particularly worse after comments from Bear Stearn’s CFO, claiming “I have been at this for 22 years, and this is about as bad as I have seen it in the fixed income market.” Concerns over the state of the mortgage market led to a credit freeze across mortgage lenders; this decision may have actually made things much worse down the line. 08/06 continued the trend of volatility, opening lower than they had on 08/03, but rising over the course of the day. The rally took place a day before a FED meeting took place, so investors were hopeful that rates would be unchanged or even cut. An interesting quote from the article, that did not age so well; “Mortgages that conform to Fannie and Freddie guidelines are considered very secure investments, in part because they are backed by the two companies.”. Only three days later, on 08/09, markets were once again in freefall. This time, the French Bank BNP Paribas, suspended operations of three of its funds, citing concerns over the American housing market. The ECB and Federal Reserve were both forced to inject money into the market due to the aforementioned credit crunch that had begun. Bonds began to see a lot of attention. 08/17 saw a surprise FED rate cut of 0.5%, sending markets upwards and attempting to allay fears of tighter credit stifling economic growth. 08/28 brought things down again, as reports suggested consumer confidence had sharply fallen, and housing prices continued their downward spiral. There were also concerns that mortgages had been given out to people unlikely to repay them. Only one day later, on 08/29, bargain hunting ensued, nearly recovering all the losses of the previous day. It is worth noting that one of the first mentions of computer trading algorithms was made on this day, which were programmed to buy low. Algorithms would only grow in popularity from here on out.

November: Nov 1st (-2.65%), Nov 7th (-2.94%), Nov 26th (-2.33%)

October passed without issues, but 11/01 triggered the first drop of a brutal month. Multiple things turned out badly. Manufacturing and consumer confidence reports suggested a slow holiday season. Exxon Mobil once again posted worse-than-expected earnings, Credit Suisse posted a huge earnings miss, and CitiGroup, one of the largest banks, received a downgraded rating, largely due to billions in losses from mortgages gone awry. Selling began right off the opening bell, with things getting so bad that the NYSE had to halt trading until the afternoon. 11/07 saw oil pushing record prices again, which would inevitably lead to inflationary issues across the board. Gas-guzzling cars were still all the rage across the U.S. market and American automakers. China also signalled that it would be getting out of dollars and dollar-based assets. 11/26 saw prices revisit three-year lows. The move to Treasuries began in earnest, which meant that there was substantially less money to go around in markets, which was already hampered by additional credit restrictions. CitiGroup announced it had plans for layoffs, and at this point, it could be safely said that things were about to get a lot worse for the stock market.

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Bush Terms, Post Dotcom / Pre-Recession (11/2002-11/2007)

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