Elon Musk's not-long-ago prediction of a 1929 market crash fails as the S&P 500 rises 50%, contradicting the Tesla CEO's gloomy outlook

The S&P 500 has risen almost 50% since then Tesla Inc And SpaceX CEO Elon Musk drew parallels between current market conditions and the infamous stock market crash of 1929.

What happened: This remarkable rally was highlighted by CNBC Carl Quintanilla.

On March 15, 2023, amid a spate of bank failures that rocked the financial sector, Musk tweeted: “The current year bears many similarities to 1929.”

This ominous comparison to one of the darkest chapters in economic history was made in response to a now unavailable post by Ark Invest CEO Cathie Woodknown for her optimistic attitude towards disruptive technologies.

Musk's tweet coincided with the collapse of Silicon Valley Bank (SVB), Signature bankAnd Silvergate CapitalEvents that briefly paralyzed the financial markets and brought back memories of the 2008 financial crisis.

The turmoil led to significant losses in market value for banking giants such as: JPMorgan Chase And Bank of Americaalthough they later recovered following rapid regulatory intervention.

See also: Inflation data to be 'watched closely' on Friday after Fed rate cuts.

Why it matters: The reference to 1929 was particularly jarring for those familiar with financial history. That year's stock market crash, known as “Black Tuesday” or “Great Crash,” triggered the Great Depression, an economic catastrophe unparalleled in modern times.

In that fateful October, the Dow Jones Industrial Average plunged 23% in just two days, setting the stage for a decade of economic hardship.

While Musk didn't elaborate on the specific similarities he observed between 1929 and the current market, Wood had previously suggested that the rise of cryptocurrencies was similar Bitcoin BTC/USD And Ethereum ETH/USD had led to the first decline in bank deposits since the Roaring Twenties. The observation suggested that potential systemic risks lurk beneath the surface of the financial system.

However, despite these dire predictions, the S&P 500 has demonstrated remarkable resilience. According to data from Benzinga Pro, the index closed at 5,745.37 on Thursday, up a staggering 47.62% from its level of 3,891.93 on the day of Musk's tweet.

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Disclaimer: This content was created in part using AI tools, and was reviewed and published by Benzinga editors.