Are S&P 500 Buybacks Flashing the Same Warning Sign as 2007 and 2018?

Correction November 10, 2026: the 1% buyback excise tax was described as cutting Q3 2025 operating earnings by "roughly 0.36%–0.41%" and as already reflected in the reported buyback totals. S&P Dow Jones Indices reports 0.36% for operating earnings and 0.41% for As Reported (GAAP) earnings as two separate figures, and the tax reduces earnings rather than the buyback dollars; the buyback-yield passages now state that the 1.4% figure is this article's own calculation rather than a third-party tracker's. Source: S&P Dow Jones Indices, "S&P 500 Q3 2025 Buybacks" press release, December 18, 2025.

Berkshire Hathaway told investors on November 7, 2026 that it spent roughly $9.6 billion buying back its own stock in the third quarter, its biggest buyback quarter ever. That announcement landed three weeks after Ned Davis Research reported that net S&P 500 buybacks had slipped back below the $1 trillion mark (on a trailing 12-month basis) for the first time since the 12 months ending September 2024. One company accelerating while the index as a whole decelerates is exactly the kind of split that past buyback cycles have shown before — and the historical record says it is worth paying attention to.

The New York Stock Exchange's Broad Street facade, illustrating the market whose member companies drive S&P 500 buyback totals
Jakub Hałun, New York Stock Exchange Broad Street facade, CC BY 4.0

Key takeaways

  • S&P 500 buybacks hit annual records of $589.1 billion in 2007 and $806.4 billion in 2018 — both years that preceded sharp market drawdowns within 12 to 15 months.
  • The trailing 12-month figure crossed $1 trillion for the first time in the period ending June 2022 ($1.005 trillion) and for the second time in the period ending September 2025 ($1.020 trillion).
  • Ned Davis Research found Q1 2026 net buybacks fell back below $1 trillion, concentrated in technology and communications, the two sectors now redirecting cash toward AI capital spending.
  • Berkshire Hathaway's $9.6 billion Q3 2026 buyback — its largest quarter on record — is a reminder that "buybacks are slowing" is a sector story, not a universal one.
  • On a rough calculation, $1.020 trillion against an approximately $70.8 trillion S&P 500 market value works out to a buyback yield near 1.4% — this article's own calculation, because the S&P DJI buyback release publishes the dollar totals but no yield.

Figures checked: November 8, 2026.

2007 and 2018: The Two Records Everyone Cites

S&P Dow Jones Indices, which has tracked quarterly buyback data for roughly two decades, confirmed the two reference points that most "are buybacks too high" arguments eventually cite. Full-year 2007 buybacks hit a then-record $589.1 billion. Eleven years later, fueled in large part by the 2017 corporate tax cut, full-year 2018 buybacks reached $806.4 billion — a 36.9% increase over the 2007 mark and, at the time, a fourth consecutive quarterly record (Q4 2018 alone was $223.0 billion, up 62.8% year over year).

Both records sat right before trouble. The 2007 figure was set the same year the subprime mortgage market began unwinding; the S&P 500 would lose more than half its value over the following 17 months. The 2018 record was punctuated by a nearly 20% fourth-quarter slide in the index itself — S&P DJI's own release noted that the record buyback dollars bought more shares precisely because Q4 2018 prices had fallen an average of 5.3%. Correlation is not causation here: companies were not buying back stock because a downturn was coming, and in both cases the subsequent declines had separate, identifiable triggers (a credit crisis in 2008, a Fed tightening scare in late 2018). But the pattern of "record buyback year, rough 12–15 months later" shows up twice in the two clearest prior peaks, which is why it gets cited as often as it does.

2022 and 2025: Crossing $1 Trillion, Twice

The trillion-dollar threshold, on a trailing 12-month basis, has only been crossed twice. The first time was the 12 months ending June 2022, at $1.005 trillion — a period that overlapped with the 2022 bear market, in which the S&P 500 fell about 25% from its January peak to its October low as the Federal Reserve raised rates aggressively to fight inflation. The second time was the 12 months ending September 2025, at a record $1.020 trillion, up 11.1% from the $918.4 billion in the prior 12-month period. Quarterly, the record stands at Q1 2025's $293.5 billion, a figure S&P DJI's Q3 2025 release explicitly flagged as the all-time high.

Period (S&P 500, aggregate)Buyback totalChangeWhat followed within ~15 months
Full year 2007$589.1 billionrecord at the time2008–2009 financial crisis; S&P 500 fell ~57% peak-to-trough
Full year 2017$519.4 billion—baseline before the 2018 tax-cut-driven surge
Full year 2018$806.4 billion+55.3% YoY, +36.9% vs. 2007Q4 2018 drop of ~20%; 2019 fully recovered
12 months to June 2022$1.005 trillionfirst time over $1T2022 bear market already underway (Jan–Oct 2022, S&P 500 -25%)
12 months to Sept. 2024$918.4 billion—baseline before the September 2025 record
12 months to Sept. 2025$1.020 trillionsecond time over $1T, +11.1% YoYQ1 2026 net buybacks reported below $1T again

Sources: S&P Dow Jones Indices press releases (2018, 2025) for all buyback figures; S&P 500 drawdown figures are widely documented historical index performance, cited here for context rather than as a forecast.

The honest caveat the table doesn't show on its own: two data points is not a statistical pattern, it's an anecdote repeated twice. A reader who wants to treat "crossing $1 trillion" as a reliable sell signal is overreading two observations. What the table does support is a narrower claim — that buyback spending running at record or near-record levels has, twice now, coincided with periods of market stress rather than periods of calm, which is reason enough to track the trend rather than ignore it.

Q1 2026: Net Buybacks Slip Below $1 Trillion Again

According to Ned Davis Research's analysis, reported in early November 2026, net S&P 500 share repurchases fell back below the $1 trillion mark in the first quarter of 2026. NDR's note to clients, relayed through market coverage, made a point of separating the aggregate number from what's happening underneath it: "aggregate buyback data hides the fact that a growing percentage of companies are not in as strong of a position to repurchase their own stock as they have been for much of the past decade."

The slowdown is not evenly spread. Communications-sector net repurchases fell to roughly $186 billion in Q1 2026, down from a recent peak above $230 billion. Technology-sector net buybacks came in around $250 billion, down from a prior high above $260 billion. Those are the same two sectors now absorbing the bulk of an unprecedented capital-spending wave: Alphabet, Amazon, Meta Platforms and Microsoft are on pace for roughly 77% combined capital-expenditure growth in 2026, according to an estimate from technology investor Gene Munster, and a FactSet analysis found that incremental annual debt as a share of capex among Alphabet, Amazon, Meta, Microsoft and Oracle has risen from about 9% in 2024 to about 32% in 2026. Put simply: the same handful of companies that have spent the most on buybacks for a decade are now financing AI data centers with a mix of cash and a meaningfully larger share of debt than before, and buybacks are one of the places that cash used to go.

Berkshire's Record $9.6 Billion Quarter — and What It Means for a $10,000 Index Position

Berkshire Hathaway's Q3 2026 report, released the Saturday before this article, showed roughly $9.6 billion spent on its own Class B shares at an average price of $503.68 — its largest buyback quarter ever, edging out the roughly $9.3 billion it spent in Q3 2020. Under Berkshire's long-standing rule, chief executive Greg Abel (who succeeded Warren Buffett at the start of 2026) can only authorize repurchases when he believes the stock trades below the business's intrinsic value, with Buffett — now chairman emeritus — consulted beforehand. A record buyback from a company whose whole investing philosophy is "don't overpay for your own stock" is a different signal than a record buyback from a company under activist pressure to prop up its share price; the two should not be read the same way, and Berkshire's number says more about one management team's view of one stock than about the market as a whole.

Here is the arithmetic worth doing before treating any aggregate buyback number as abstract. The S&P 500's total market value was reported near $70.8 trillion in early November 2026 as the index traded above 7,800. Measured against the 12-month $1.020 trillion buyback figure (itself measured as of September 2025, so the two dates don't line up exactly — a gap worth flagging rather than hiding), that works out to a buyback yield of roughly 1.4% ($1.020T ÷ $70.8T = 1.44%). That is this article's own arithmetic on the two figures above: the S&P DJI buyback release reports the dollar totals but does not publish a buyback yield, and third-party trackers that do quote one use different denominators (free float versus full market value) and different 12-month windows, so their numbers sit a little above or below this one rather than confirming it. For a reader holding $10,000 in an S&P 500 index fund, a 1.44% buyback yield means the companies in that fund are collectively retiring shares worth about $144 of that reader's proportional stake each year — money that, assuming no change in earnings, raises earnings per share for the shares that remain outstanding, in the same way a dividend would return cash, except without a taxable cash distribution in the reader's brokerage account. That is the entire mechanical case for why buybacks matter to a passive investor who never sells a single share directly tied to a repurchase program.

What the Record Table Says About What Tends to Come Next

None of this is a timing signal, and treating it as one would be the single easiest way to misuse this article. The honest, limited claim: both prior buyback records (2007, 2018) preceded market stress, and both prior trillion-dollar crossings (mid-2022, late-2025) occurred during or immediately before periods of elevated volatility. The current data point — a Q1 2026 pullback concentrated in two AI-capex-heavy sectors — is the opposite pattern: a slowdown rather than a new record. If the 2007/2018 records say "extreme buyback spending has coincided with trouble ahead," the Q1 2026 pullback is at minimum not a repeat of that specific setup. The more relevant risk flagged by Ned Davis Research is a different one: that a growing share of S&P 500 companies no longer have the balance-sheet strength to keep buying back stock at the old pace, which is a statement about corporate financial flexibility, not about where the index is headed next. Those are two different risks, and conflating them is the kind of error that turns a useful data point into a false alarm.

A Reader's Checklist: Finding Your Own Buyback Exposure

  • Check sector weight, not just index membership. If your portfolio is overweight technology and communications — the two sectors cutting buybacks the most — your personal buyback yield is likely falling faster than the index average, even if you hold an S&P 500 fund.
  • Separate debt-funded capex from cash-funded capex. A company financing AI spending with free cash flow and trimming buybacks is a different balance sheet than one financing it with new debt while still buying back stock — the FactSet debt-share data above is one way to tell them apart for the largest spenders.
  • Read the buyback authorization, not just the headline number. An authorized dollar amount is a ceiling, not a promise; the quarterly repurchase figures S&P DJI reports are what companies actually spent.
  • Treat "record buyback quarter" and "record buyback year" as separate facts. Berkshire's record is a single-company, single-quarter event; the $1.020 trillion figure is a trailing 12-month, whole-index event. Mixing the two overstates how broad either signal is.

FAQ

Are stock buybacks the same thing as dividends?

No. A dividend pays cash directly to every shareholder, which is taxable in the year received outside a tax-advantaged account. A buyback reduces the number of outstanding shares, which can raise earnings per share and, over time, a stock's price — but it delivers no cash to a shareholder who doesn't sell, and the benefit is diluted if the company is simply offsetting new share issuance (such as employee stock compensation) rather than shrinking the float.

Did Q1 2026 buybacks actually set a new low, or just fall from a record?

Based on Ned Davis Research's reporting, Q1 2026 net buybacks fell below the $1 trillion trailing 12-month threshold but were still described as "close to record levels" in aggregate — this is a pullback from a record, not a multi-year low.

Does Berkshire's record buyback mean Warren Buffett thinks the market is cheap?

It reflects new CEO Greg Abel's view of Berkshire's own stock specifically, not a market-wide call — the two should not be conflated, and Berkshire itself does not frame its repurchases as a market-timing tool.

Where does the 1% buyback tax fit into these numbers?

A 1% excise tax on net buybacks has applied since 2023. S&P DJI's Q3 2025 release gives two separate figures rather than a range: the tax reduced that quarter's S&P 500 operating earnings by 0.36% and As Reported (GAAP) earnings by 0.41%, with the 12-month impact at 0.40% for operating earnings. S&P DJI's own read is that the tax "continues to be a manageable expense and has not impacted overall buybacks," so it lands as a small earnings cost, not as a reduction in the buyback dollar totals quoted above.

Is a falling buyback yield automatically bad for a long-term index investor?

Not automatically. If the cash is redirected into capital spending that eventually raises earnings — the stated bet behind the current AI buildout — a lower buyback yield today could be offset by higher earnings growth later. The record above shows what happened after past buyback extremes; it does not show what will happen after the current capex-driven pullback, which has no close historical precedent of the same scale.

Related reading

Tip: If you work through the checklist above on your own holdings, keep the results somewhere you can revisit next quarter — an investment journal suits per-company notes on buyback yield and share count, while an investment planner helps you schedule those quarterly check-ins. (These are Amazon Associate links — we may earn a small commission on qualifying purchases.)

Sources

This article is general investment education, not personalized investment advice. It does not recommend buying or selling any specific security. Figures are stated as of the dates noted above and sourced from S&P Dow Jones Indices, Ned Davis Research (via secondary reporting), and company disclosures; buyback and market-value data change quarterly and should be reverified before making any investment decision. Consult a licensed financial advisor for guidance specific to your own situation.

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