Amid rising oil prices stemming from another war in the Middle East and signs of instability in the financial system, American concerns about another 2008-like crash are rising nearly two decades after the global financial crisis.
The poor performance of stocks has compounded those worries this year, leading the Nasdaq to dip in and out of correction territory this past week.
“Commodity performance in 2026 is very close to the price action seen from mid-’07 to mid-’08,” according to a March 12 note to clients written by Michael Hartnett, chief investment strategist at Bank of America.
The recent increase in oil prices since the United States and Israel began attacking Iran in Feb. 28, and illegal issues in the private debt market, remind of the famous quote of Mark Twain: “History does not repeat itself, but it often rhymes.”
While current market and economic conditions may not mirror 2008, there are similarities to that year, when the S&P 500 crashed 38%. Many Americans have fond memories of the subprime mortgage crisis that decimated the housing market and triggered the Great Depression.
We spoke to experts about what makes the conditions today the same as back then, why they are happening now and what the biggest differences are they see.
The volatility of the oil market today is very different than in 2008
Hartnett’s assertion that market conditions today are similar to those leading to the financial crisis is due to two main factors: the rapid rise in oil prices and the vulnerability of the financial system.
He noted that the price of oil doubled between July 2007 and August 2008. Today, Brent crude – the global oil benchmark – is trading about 60% higher than it was in early February, in large part because Iran has closed the Strait of Hormuz, a vital waterway for global supply chains.
From a one-year low of $58.66 on Dec. 16, oil prices have risen more than 78% to more than $100 per barrel at press time.
But according to Dustin Thackeray, head of portfolio management at Crewe Advisors, that rapid rise is based on a very different pricing model than in 2008. And there are very different results.
“In 2007, there were supply and demand problems,” Thackeray said. “Today, there is less of a supply crisis – except that the Strait of Hormuz is closed – and we are starting to see the destruction of demand in the world’s oil.”
According to the US Energy Information Agency, US crude oil production reached an all-time high last year, growing by 3%, or the equivalent of 350,000 barrels per day. That led to more money in early 2026 and underlines how – unlike in 2008 – supply is not the biggest problem at hand.
Thackeray also pointed out that the oil industry has been underperforming since energy led 11 sectors of the S&P 500 in 2022 amid the last bear market. “Electricity companies should have been paid less,” he said.
This year, things have changed a lot. Energy has delivered a market-leading 32% year-to-date gain, while the technology sector is down more than 6% and the broader S&P has lost nearly 4%.
While Thackeray acknowledges that the protracted conflict with Iran may continue to have negative consequences – including lower stock prices, inflationary pressures and stronger economic growth – he notes that “the war has quickly consolidated sales.”
Without you, the markets may have been able to maintain stability.
Private debt – not the housing bubble – threatens the financial system
In the past, the stress on the US financial system was evident in the collapse of the housing market after the subprime mortgage crisis.
Today, the situation is very different. Specifically, Thackeray says, the concern of many investors centers on whether there is a bubble in private debt.
Private equity involves non-bank institutions (eg, private equity firms, asset managers and business development companies) that lend money to companies that wish to bypass the traditional banking system, often resulting in higher interest rates for borrowers and lower financing than their public debt counterparts.
While Hartnett pointed to the “subprime tremors” as warning signs in 2007, today he says “policymakers are always riding to the rescue of Wall Street.” That would encourage high-risk lending practices that could lead to more automation, thus creating pressure on the financial system.
The sovereign debt default rate has risen to record highs, causing serious concern for investors and analysts. According to Fitch Ratings, the rate increased to 5.8% year-over-year since January, marking the highest rate since its inception in August 2024.
Given the lack of transparency in the private credit industry, details of how bad the problem has become are limited. But Thackeray says those problems may end with traditional banks — a sentiment echoed by Itay Goldstein, a professor of finance and economics at the University of Pennsylvania’s Wharton School.
In an interview published Tuesday, Goldstein told the university’s media Penn Today that private credit lenders operate in what is often called the “shadow banking” system, performing activities similar to banks but with much less regulatory oversight and fewer disclosure requirements.
“This lack of transparency means that if something starts to break, we may not know until it’s too late,” said Goldstein. “The collapse will not always be contained in the financial markets.”
A possible collapse of private credit would be as much of a threat to Main Street as it would be to Wall Street. Penn Today it has been noted that private debt is increasingly funded by people’s savings every day. Over the past decade, prominent investment firms have been buying or partnering with life insurance and annuity providers to gain access to funds — and leveraging those assets for private lending.
In accordance with Penn Today“When these loans fail, it’s not just the deep-pocketed investors, investment banks and tech startups that get the bulk of these loan losses. It’s also the pensions and insurance policies that support them.”
The preparation is normal and healthy
In addition to rising energy prices and sovereign debt risks, the economy is facing a soft labor market and declining consumer confidence. However, gross domestic product is predicted to grow. The Federal Reserve Bank of Atlanta expects GDP growth of 2% in the first quarter of the year.
As for the stock market, a correction – a drop of 10% to 20% from a recent high – occurs, on average, once a year. The last time the stock market was up was April 2025 during the fallout from President Donald Trump’s tax announcements. That puts the latest Nasdaq correction on schedule.
The index has since recovered some of its losses from the president’s announcements that negotiations with Iran are continuing, but the market remains in a critical position. That losses can exceed 20%, so putting stocks in a bear market, has high conditions.
Without a doubt, we can see a 20% decline, it all depends on how long the conflict in the Middle East continues, how long the Strait. [of Hormuz] it stays closed and how much damage it causes every day when it’s closed,” Thackeray said. “Over and over again, we see all kinds of damage occurring in the global economy.”
But Thackeray also emphasizes that, although the potential for higher inflation is there, the market and the economy remain healthy. The current risks to the financial system are very different than they were in 2008.
“We have a very powerful consumer that is benefiting [One Big, Beautiful Bill Act] earnings this year, and consumers overall are in a very good position,” he says. “So all of that should match companies and earnings in 2026.”
That fundamental strength in oversold names in the stock market is something he sees as an opportunity for long-term investors.
“Maybe don’t throw all your eggs in the basket too soon,” Thackeray said. “We will never lose any type of market. But if we start putting money to work systematically, we will benefit from the bottom, especially if we are long-term investors.”
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