The SEC blamed the 1986 crash on fundamentals, not index trading

Evidence

Rubinstein’s concerns were, however, brought into focus by a sharp market decline on September 11 and 12, 1986. On September 11, the Dow Jones industrial average fell 4.6 percent, its largest one-day fall for nearly 25 years (SEC 1987, p. 1). The Securities and Exchange Commission (SEC) investigated, and “concluded that the magnitude of the September decline was a result of changes in investors’ perception of fundamental economic conditions, rather than artificial forces arising from index-related trading strategies.” — Donald MacKenzie, An Engine, Not a Camera, 814

Categorization

• XREF: This is a dry-run of the 1987 crash aftermath, where the same SEC-style exculpation would be contested. Connects to the upcoming crash chapter and to the classic performativity-vs-description dispute.