10 vintage photos show how the Black Monday stock market crash unfolded
For some, this economic instability has brought to mind past financial crises, like the Great Recession, the Great Depression, and the October 19, 1987, crisis known as Black Monday.
On Black Monday, the S&P 500 saw a historic 20.5% downturn, and the Dow Jones plummeted by 22.6%. This was the biggest plunge the markets had taken since October 28, 1929, the start of the Great Depression, which lasted until 1932.
These 10 pictures show how Black Monday impacted markets worldwide and explain the factors that contributed to the financial crash.
Following a few years of economic strength, stock prices climbed up 44% in the first half of 1987, creating an asset bubble that began imploding on October 16, when reports of a growing trade deficit started spreading.By the time the markets closed on Friday, October 16, 1987, economic uncertainty signaled what would come at the beginning of the week as the Dow Jones began to decline, seeing a 4.6% downturn by the end of the day.That Saturday, Treasury Secretary James Baker's proposal to devalue the US dollar to minimize the growing trade deficit escalated anxieties, heightening financial panic.
As the global markets plunged, newscasts turned their focus to the economy. However, the technologies mass media relied on at the time — mostly newspapers and TV news — failed to update consumers quickly enough about the market movements as they progressed by the minute, adding to the existing panic and heightening the misinformation experienced in and outside Wall Street.
Following the crash, the US Securities and Exchange Commission began asking stock exchanges to employ circuit breakers to halt market activity during extreme volatility. This aimed to both prevent panic from spreading and incentivize traders to think through their decisions.The circuit breakers have only been used a handful of times since their inception, including during the early days of the COVID-19 pandemic and, most recently, following Trump's tariff announcements.
On Black Monday, the New York Stock Exchange lost over $500 billion in market value, according to Goldman Sachs.However, the markets were able to begin recovering in the following weeks, and by 1988, the markets had surpassed their pre-crash record high.Although short-lived, the financial crash helped reform the stock exchanges and put mechanisms in place to prevent a drastic downturn and widespread panic from impacting US and global markets.
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