Black Monday, October 19, 1987, remains etched in financial history as one of the most dramatic single-day stock market crashes. The Dow Jones Industrial Average plummeted a staggering 22.61%, a loss unprecedented in its severity and speed.
Several factors contributed to the crash, including program trading, overvaluation, and global economic anxieties. While a precise cause remains debated, the sheer panic that gripped investors fueled the downward spiral.
The impact was immediate and far-reaching. Fortunes vanished, and investor confidence crumbled. While many feared a repeat of the Great Depression, swift action by the Federal Reserve, providing liquidity to the market, helped avert a complete economic collapse.
Black Monday served as a stark reminder of market volatility and the potential for rapid, unexpected downturns. It led to reforms in trading regulations and a greater awareness of risk management. Although the market eventually recovered, Black Monday continues to be studied as a cautionary tale for investors worldwide, demonstrating the enduring impact of a single, devastating day.
