Crazy days in the stock market
It was the best of times, it was the worst of times, it was a market of tranquility, it was a market of chaos, it was an era of wealth creation, it was an era of wealth destruction. It was July 2026, when in a single day Amazon’s market cap rose by $388B but Apple’s fell by $360B.[1]
July is usually a quiet month in the U.S. stock market, with vacationing traders and subdued volume and volatility. Not July 2026. Return dispersion in the U.S. stock market rose even higher than the extreme levels of April and May. While the aggregate market appeared calm, prices of individual stocks gyrated wildly.
Figure 1 shows the S&P 500 One-Day Realized Dispersion Index. Dispersion on July 30 was 89, ranking third out of the 2,855 days since September 2015. Only November 9, 2020 (“vaccine Monday”) and January 27, 2025 (DeepSeek) had higher realized dispersion. July 31 was almost as high at 69.
Figure 1: Daily Return Dispersion
S&P 500 One-Day Realized Dispersion Index, Sep 1, 2015 – Aug 12, 2026
One way of understanding the staggering dispersion of July 2026 is to consider the dollar magnitudes involved. Table 1 shows changes in market cap for individual U.S. stocks in the last two days of the month.
The total market value of Microsoft rose $450B on July 30. How much is $450B? Houston, Texas is one of the largest cities in America, with 2.4M residents spread across 672 square miles. Imagine that an exact duplicate of Houston (containing every taxable property within the city limits) was to fall like manna from heaven and gently land on a previously worthless site. The total value of this miraculous gift would be $431B.[2] Thus Microsoft went up by 1.04 Houstons on July 30.
Or we can consider Apple’s decline in value of $360B on July 31. If the entire city of San Francisco were swallowed by the earth, that would destroy $354B of assessed property value.[3] Alternatively, you could say the loss experienced by Apple shareholders was equivalent to 3.6x the damage wrought by Hurricane Sandy in 2012 (adjusting for inflation).
Table 1: Changes in market cap on July 30 and 31
| Name | Date | Change in market cap | Percent return | Equivalent city property value | Hurricane Sandy equivalent |
|---|---|---|---|---|---|
| Microsoft | July 30 | +$450B | +16% | Houston ($431B) | 4.5 |
| Meta | July 30 | -$102B | -8% | Colorado Springs ($104B) | 1.0 |
| Amazon | July 31 | +$388B | +15% | San Diego ($386B) | 3.8 |
| Apple | July 31 | -$360B | -7% | San Francisco ($354B) | 3.6 |
Is this stock-specific volatility a sign of market mania, or is it a rational reflection of new information? I don’t know. Prior times of high daily dispersion include the tech stock bubble. On the other hand, we also saw high dispersion in the GFC and COVID, so high dispersion is not always a sign of speculative excess. All four of the observations in Table 1 are earnings announcement dates, so these price moves are arguably rational responses to fundamental news.
One thing is for sure: your portfolio should be designed to handle extreme price volatility. According to the famous Warren Buffett quote, you only discover who’s swimming naked when the tide goes out. The current situation is a bit more dire; only when the earthquake occurs do you discover which house is well-built. Now, more than ever, you need rock-solid risk management and portfolio construction.
Endnotes
[1] References to this and other companies should not be interpreted as recommendations to buy or sell specific securities. Acadian and/or the author of this post may hold positions in one or more securities associated with these companies.
[2] According the 2025 Annual Comprehensive Financial Report of the City of Houston.
[3] This event is portrayed in San Andreas (2015) starring Dwayne “The Rock” Johnson.
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