Which 1998 event caused major stock-market turmoil after Russia defaulted on domestic debt?

The 1998 event that caused major stock-market turmoil after Russia defaulted on domestic debt was the Russian financial crisis.

Russia devalued the ruble and declared a moratorium on some foreign debt payments in August 1998. The crisis followed falling oil prices, weak tax collection, political uncertainty, and heavy government borrowing through short-term debt instruments.

The turmoil spread beyond Russia. The collapse of the hedge fund Long-Term Capital Management created fears that forced asset sales and losses could destabilize the international financial system. The U.S. Federal Reserve helped coordinate a private-sector rescue of the fund.

The crisis is often confused with the 1997 Asian financial crisis, which began in Thailand and spread through several Asian economies. Russia’s 1998 crisis was a separate shock, although global investors and capital flows linked the episodes.