Editing Stock market crash (section)

==Examples==
===Tulip Mania===
{{Main|Financial history of the Dutch Republic|Tulip Mania}}

[[Tulip Mania]] (1634–1637), in which some single tulip bulbs allegedly sold for more than 10 times the annual income of a skilled [[artisan]], is often considered to be the first recorded [[economic bubble]].

===Panic of 1907===   
{{Main|Panic of 1907}}
In 1907 and in 1908, stock prices fell by nearly 50% due to a variety of factors, led by the manipulation of [[copper]] stocks by the [[Knickerbocker Trust Company]].<ref>{{cite news | url=https://trove.nla.gov.au/newspaper/article/41473783 |title=American Banks  'In The Jungle'. | newspaper=[[The Advertiser (Adelaide)|The Advertiser]] | location=Adelaide | date=March 16, 1933 | page=8 | via=[[National Library of Australia]]}}</ref> Shares of [[United Copper]] rose gradually up to October, and thereafter crashed, leading to panic.<ref name=FDS-H-05>{{Cite web | url=https://www.minneapolisfed.org/article/1988/born-of-a-panic-forming-the-fed-system | title=Born of a Panic: Forming the Fed System | publisher=[[Federal Reserve Bank of Minneapolis]]}}</ref><ref name=FDS-H-06>{{cite magazine | url=https://www.smithsonianmag.com/history/the-financial-panic-of-1907-running-from-history-82176328/ | title=The Financial Panic of 1907: Running from History | last=Tucker | first=Abigail | magazine=[[Smithsonian Magazine]] | date=October 9, 2008}}</ref> Several investment trusts and banks that had invested their money in the stock market fell and started to close down. Further bank runs were prevented due to the intervention of [[J. P. Morgan]].<ref>{{cite web | url=https://u-s-history.com/pages/h952.html | title=Panic of 1907: J.P. Morgan Saves the Day}}</ref> The panic continued to 1908 and led to the formation of the [[Federal Reserve]] in 1913.<ref>{{cite book | url=https://www.hbs.edu/faculty/Pages/item.aspx?num=24079 | last1=NO | first1=Tom | title=Stock market swings and the value of innovation | publisher=[[Harvard Business School]] | location=[[Boston]] }}</ref>

===Wall Street Crash of 1929===
{{Main|Wall Street Crash of 1929}}
{{ multiple image | total_width=500
| image1= 19291030 Crash of '29 - New York Times.jpg |caption1= After large market declines on October 28 and 29, ''The New York Times'' described the financial community's response to "the most disastrous trading day in the stock market's history". Margin requirements were reduced to 25%, banking leaders expressed assurance of their support, and the sentiment on Wall Street was said to be "more cheerful" after earlier declines.<ref name=NYTimes_19291030>{{cite news |title=STOCKS COLLAPSE IN 16,410,030-SHARE DAY, BUT RALLY AT CLOSE CHEERS BROKERS; BANKERS OPTIMISTIC, TO CONTINUE AID |url=https://timesmachine.nytimes.com/timesmachine/1929/10/30/96008276.html |work=The New York Times |date=October 30, 1929}}</ref>
|| image2= Crowd outside nyse.jpg |caption2= Crowd gathering on [[Wall Street]] the day after the 1929 crash
}}
The economy grew for most of the [[Roaring Twenties]]. It was a technological golden age, as innovations such as the radio, automobile, aviation, telephone, and the [[electric power transmission]] grid were deployed and adopted. Companies that had pioneered these advances, including [[Radio Corporation of America]] (RCA) and [[General Motors]], saw their stocks soar. Financial corporations also did well, as [[Wall Street]] bankers [[Public float|floated]] [[mutual fund]] companies (then known as [[investment trust]]s) like the [[Goldman Sachs]] Trading Corporation. Investors were infatuated with the returns available in the stock market, especially by the use of [[Leverage (finance)|leverage]] through [[Margin (finance)#Margin buying|margin debt]] (i.e., borrowing money from your stockbroker to finance part of your purchase of stocks, using the bought securities as collateral).

On August 24, 1921, the [[Dow Jones Industrial Average]] (DJIA) was at 63.9. By September 3, 1929, it had risen more than sixfold to 381.2. It did not regain this level for another 25 years. By the summer of 1929, it was clear that the economy was contracting, and the stock market went through a series of unsettling price declines. These declines fed investor anxiety, and events came to a head on October 24, 28, and 29 (known respectively as [[Wall Street Crash of 1929|Black Thursday]], [[Wall Street Crash of 1929|Black Monday]], and [[Wall Street Crash of 1929|Black Tuesday]]).

On Black Monday, the DJIA fell 38.33 points to 260, a drop of 12.8%. The deluge of selling overwhelmed the [[ticker tape]] system that normally gave investors the current prices of their shares. [[Telephone line]]s and telegraphs were clogged and were unable to cope. This information vacuum only led to more fear and panic. The technology of the New Era, previously much celebrated by investors, now deepened their suffering.

The following day, Black Tuesday, was a day of chaos. Forced to liquidate their stocks because of [[Margin (finance)#Margin call|margin call]]s, overextended investors flooded the exchange with sell orders. The Dow fell 30.57 points to close at 230.07 on that day. The glamour stocks of the age saw their values plummet. Across the two days, the DJIA fell 23%.

By the end of the weekend of November 11, 1929, the index stood at 228, a cumulative drop of 40% from the September high. The markets rallied in succeeding months, but it was a temporary recovery that led unsuspecting investors into further losses. The DJIA lost 89% of its value before finally bottoming out in July 1932. The crash was followed by the [[Great Depression]], the worst [[Crisis (economic)|economic crisis]] of modern times, which plagued the stock market and Wall Street throughout the 1930s.

===October 19, 1987===
{{Main|Black Monday (1987)}}
[[Image:Black Monday Dow Jones.svg|thumb|250px|right|[[Dow Jones Industrial Average|DJIA]] (19 July 1987 through 19 January 1988)]]

The mid-1980s were a time of strong economic optimism. From August 1982 to its peak in August 1987, the [[Dow Jones Industrial Average]] (DJIA) rose from 776 to 2722. The rise in market indices for the 19 largest markets in the world averaged 296% during this period. The average number of shares traded on the [[New York Stock Exchange]] rose from 65 million shares to 181 million shares.<ref>{{cite web | url=http://archive.gao.gov/d30t5/134907.pdf | title=Preliminary Observations on the October 1987 Crash | publisher=[[Government Accountability Office]] | date=January 1988}}</ref>

The crash on October 19, 1987, [[Black Monday (1987)|Black Monday]], was the climactic culmination of a market decline that had begun five days before on October 14. The DJIA fell 3.81% on October 14, followed by another 4.60% drop on Friday, October 16. On Black Monday, the DJIA plummeted 508 points, losing 22.6% of its value in one day. The [[S&P 500 Index]] dropped 20.4%, falling from 282.7 to 225.06. The [[NASDAQ Composite]] lost only 11.3%, not because of restraint on the part of sellers, but because the [[NASDAQ]] [[market system]] failed. Deluged with sell orders, many stocks on the NYSE faced [[trading halt]]s and delays. Of the 2,257 NYSE-listed stocks, there were 195 trading delays and halts during the day.<ref>U.S. GAO op. cit. p. 55</ref> The NASDAQ market fared much worse. Because of its reliance on a "market making" system that allowed [[market maker]]s to withdraw from trading, liquidity in NASDAQ stocks dried up. Trading in many stocks encountered a pathological condition where the [[bid price]] for a stock exceeded the [[ask price]]. These "locked" conditions severely curtailed trading. On October 19, trading in [[Microsoft]] shares on the NASDAQ lasted a total of 54 minutes.

The crash was the greatest single-day loss that Wall Street had ever suffered in continuous trading up to that point. Between the start of trading on October 14 to the close on October 19, the DJIA lost 760 points, a decline of over 31%.

In October 1987, all major world markets crashed or declined substantially. The [[FTSE 100 Index]] lost 10.8% on that Monday and a further 12.2% the following day. The least affected was Austria (a fall of 11.4%) while the most affected was Hong Kong with a drop of 45.8%. Out of 23 major industrial countries, 19 had a decline greater than 20%.<ref>{{Cite journal | arxiv=cond-mat/0301543 | last=Sornette | first=Didier Sornette | author-link=Didier Sornette | title=Critical Market Crashes | journal=Physics Reports | volume=378 | issue=1 | pages=1–98 | year=2003 | doi=10.1016/S0370-1573(02)00634-8 | bibcode=2003PhR...378....1S| s2cid=12847333 }}</ref>

Despite fears of a repeat of the [[Great Depression]], the market rallied immediately after the crash, posting a record one-day gain of 102.27 the very next day and 186.64 points on Thursday, October 22. It took only two years for the Dow to recover completely; by September 1989, the market had regained all of the value it had lost in the 1987 crash. The DJIA gained 0.6% during calendar year 1987.

No definitive conclusions have been reached on the reasons behind the 1987 Crash. Stocks had been in a multi-year bull run and market [[price–earnings ratio]]s in the U.S. were above the post-war average. The [[S&P 500]] was trading at 23 times earnings, a postwar high and well above the average of 14.5 times earnings.<ref>U.S. GAO op. cit. p. 37</ref> [[Herd behavior]] and psychological [[feedback]] loops play a critical part in all stock market crashes but analysts have also tried to look for external triggering events. Aside from the general worries of stock market overvaluation, blame for the collapse has been apportioned to such factors as [[program trading]], [[dynamic asset allocation|portfolio insurance]] and [[derivative (finance)|derivatives]], and prior news of worsening [[economic indicator]]s (i.e. a large U.S. merchandise [[balance of trade|trade deficit]] and a falling [[United States dollar|U.S. dollar]], which seemed to imply future interest rate hikes).<ref>[http://hnn.us/articles/895.html – ''What caused the Stock Market Crash of 1987?'']</ref>

One of the consequences of the 1987 Crash was the introduction of the circuit breaker or [[trading curb]] on the NYSE. Based upon the idea that a cooling-off period would help dissipate [[panic selling]], these mandatory market shutdowns are triggered whenever a large pre-defined market decline occurs during the [[trading day]].

===2008 financial crisis===
{{Main|2008 financial crisis}}
[[File:Lehman Brothers Times Square by David Shankbone.jpg|thumb|The collapse of [[Lehman Brothers]] was a symbol of the Crash of 2008.]]
[[File:OMX Iceland 15 SEP-OCT 2008.png|thumb|right|[[OMX Iceland 15]] closing prices during the five trading weeks from September 29, 2008, to October 31, 2008]] 
[[File:S&P BSE SENSEX chart.svg|thumb|right|During the [[2008 financial crisis]], the [[BSE Sensex]] experienced a sharp decline. It dropped from over 21,000 points in January 2008 to below 8,000 points in October 2008.<ref>
{{Cite news |url = https://www.ndtvprofit.com/business/the-sensex-journey-from-2008-to-2013-371137 |title = The Sensex journey: From 2008 to 2013 |publisher = [[NDTV Profit]] |date = 1 November 2013 }}</ref>]]  
On September 15, 2008, the [[bankruptcy of Lehman Brothers]] and the collapse of [[Merrill Lynch]] along with a liquidity crisis of [[American International Group]], all primarily due to exposure to packaged subprime loans and credit default swaps issued to insure these loans and their issuers, rapidly devolved into a global crisis. This resulted in several [[bank failure]]s in Europe and sharp reductions in the value of stocks and commodities worldwide. The failure of banks in Iceland resulted in a devaluation of the [[Icelandic króna]] and threatened the government with bankruptcy. Iceland obtained an emergency loan from the [[International Monetary Fund]] in November.<ref>{{cite news |url=http://news.bbc.co.uk/2/hi/in_depth/7738874.stm | title=BBC News – Business – IMF approves $2.1bn Iceland loan |work=[[BBC News]] |date=November 20, 2008}}</ref> In the United States, 15 banks failed in 2008, while several others were rescued through government intervention or acquisitions by other banks.<ref>{{Cite news | url=https://www.marketwatch.com/story/two-banks-fold-bringing-total-to-15-failures-this-year | title=Two banks fold, bringing total to 15 failures this year | first=John  | last=Letzing | work=[[MarketWatch]] | date=October 10, 2008}}</ref> On October 11, 2008, the head of the [[International Monetary Fund]] (IMF) warned that the world financial system was teetering on the "brink of systemic meltdown".<ref>{{Cite news | url=https://www.reuters.com/article/us-financial3/imf-warns-of-financial-meltdown-idUSTRE49A36O20081011 | title=IMF warns of financial meltdown | first1=Lesley | last1=Wroughton | first2=Francois | last2=Murphy | work=[[Reuters]] | date=October 11, 2008}}</ref>

The economic crisis caused countries to close their markets temporarily.

On October 8, the [[Indonesia]]n stock market halted trading, after a 10% drop in one day.

''[[The Times]]'' of London reported that the meltdown was being called the ''Crash of 2008'', and older traders were comparing it with Black Monday in 1987. The fall that week of 21% compared to a 28.3% fall 21 years earlier, but some traders were saying it was worse. "At least then it was a short, sharp, shock on one day. This has been relentless all week."<ref>{{cite news | url=https://www.thetimes.com/business-money/companies/article/its-irrational-fear-the-markets-will-trash-anything-that-walks-bcrqtqsfjgf | title=It's irrational fear. The markets will trash anything that walks | first=David | last=Wighton | work=[[The Times]] | date=October 11, 2008 | url-access=subscription}}</ref> Other media also referred to the events as the "Crash of 2008".<ref>{{Cite magazine | url=https://www.newyorker.com/business/james-surowiecki/what-precipitated-the-stock-market-crash-of-2008 | title=What Precipitated The Stock Market Crash of 2008? | first=James | last=Surowiecki | magazine=[[The New Yorker]] | date=January 5, 2009}}</ref>

From October 6–10, 2008, the Dow Jones Industrial Average (DJIA) closed lower in all five sessions. Volume levels were record-breaking. The DJIA fell over 1,874 points, or 18%, in its worst weekly decline ever on both a points and percentage basis. The S&P 500 fell more than 20%.<ref>{{cite news | url=https://www.telegraph.co.uk/finance/financialcrisis/3174151/Financial-crisis-US-stock-markets-suffer-worst-week-on-record.html |archive-url=https://ghostarchive.org/archive/20220112/https://www.telegraph.co.uk/finance/financialcrisis/3174151/Financial-crisis-US-stock-markets-suffer-worst-week-on-record.html |archive-date=2022-01-12 |url-status=live | title=Financial crisis: US stock markets suffer worst week on record | work=[[The Daily Telegraph]] | date=October 10, 2008 | url-access=subscription}}{{cbignore}}</ref> The week also set three top-ten NYSE Group Volume Records with October 8 at #5, October 9 at #10, and October 10 at #1.

Having been suspended for three successive trading days (October 9, 10, and 13), the Icelandic stock market reopened on 14 October, with the main index, the [[OMX Iceland 15]], closing at 678.4, which was about 77% lower than the 3,004.6 at the close on October 8. This reflected that the value of the three big banks, which had formed 73.2% of the value of the OMX Iceland 15, had been set to zero.

On October 24, 2008, many of the world's stock exchanges experienced the worst declines in their history, with drops of around 10% in most indices.<ref>{{cite news | url=https://www.marketwatch.com/story/indexes-fall-hard-on-bloody-friday | title=Indexes fall hard on bloody Friday | first=V. Phani  | last=Kumar  | work=[[Marketwatch]] | date=October 24, 2008}}</ref> In the U.S., the DJIA fell 3.6%, although not as much as other markets.<ref>{{Cite news | url=https://money.cnn.com/2008/10/24/markets/markets_newyork/index.htm | title=Stocks can't shake the blues | first=Alexandra | last=Twin | work=[[CNN]] | date=October 24, 2008}}</ref> The [[United States dollar]] and [[Japanese yen]] soared against other major currencies, particularly the [[British pound]] and [[Canadian dollar]], as world investors sought safe havens. Later that day, the deputy governor of the [[Bank of England]], [[Charlie Bean (economist)|Charlie Bean]], suggested that "This is a once in a lifetime crisis, and possibly the largest financial crisis of its kind in human history."<ref>{{Cite news | url=https://www.reuters.com/article/britain-bank-bean/financial-crisis-may-be-worst-in-history-boes-bean-idUSLAC00300720081024 | title=Financial crisis may be worst in history-BoE's Bean | work=[[Reuters]] | date=October 24, 2008}}</ref>

By March 6, 2009, the DJIA had dropped 54% to 6,469 from its peak of 14,164 on October 9, 2007, over a span of 17 months, before beginning to recover.<ref>{{Cite book | url=https://books.google.com/books?id=nKk0DwAAQBAJ | title=Evolutions in Corporate Governance: Towards an Ethical Framework for Business Conduct | first=Alison L. | last=Dempsey | publisher=[[Routledge]] | year=2017| isbn=9781351277389 }}</ref>

===COVID-19 pandemic (2020)===
{{Main|2020 stock market crash}}{{further|2020 Russia–Saudi Arabia oil price war}}
[[File:Indices S&P BSE 500 (2015 to 2020).png|thumb|220x220px|Indices: S&P [[BSE 500]] (January 2015 to November 2020). Blue highlight reflects COVID-19 period (taken to start from March 2020 as per first lockdown).|alt=]]
[[File:Indices S&P BSE 500 Period Jan - 2015 to May - 2020.png|right|thumb|400x400px|Indices: S&P BSE 500 (Period Jan – 2015 to May – 2020). Open, High, Low, Close visible. Fall depicted in black. Rise depicted in white.]]
During the week of February 24–28, 2020, stock markets dropped as the [[COVID-19 pandemic]] spread globally. The FTSE 100 dropped 13%, while the DJIA and S&P 500 Index dropped 11–12% in the biggest downward weekly drop since the [[2008 financial crisis]].

On Monday, March 9, 2020, after the launch of the [[2020 Russia–Saudi Arabia oil price war]], the FTSE and other major European stock market indices fell by nearly 8%. Asian markets fell sharply and the S&P 500 Index dropped 7.60%.<ref>{{Cite news | url=https://www.bbc.com/news/business-51796806 | title=Global shares plunge in worst day since financial crisis |work=[[BBC News]] |date=March 9, 2020 }}</ref> The Italian FTSE MIB fell 2,323.98 points, or 11.17%.<ref>{{cite web |url=https://www.ansa.it/english/news/2020/03/09/coronavirus-milan-bourse-plunges-10.8-spread-soars_c24efa69-9cd3-447b-bc88-26aff2b7ed0e.html |title=Coronavirus: Milan bourse plunges, spread soars | work=[[Agenzia Nazionale Stampa Associata]] | date=9 March 2020}}</ref>

On March 12, 2020, a day after US President [[Donald Trump]] announced a travel ban from Europe, stock prices again fell sharply. The DJIA declined 9.99% – the largest daily decline since [[Black Monday (1987)]] – despite the [[Federal Reserve]] announcing it would inject $1.5 trillion into money markets.<ref>{{Cite news |url=https://www.washingtonpost.com/us-policy/2020/03/12/markets-stocks-today-coronavirus/ |title=U.S. stock market suffers worst crash since 1987, as Americans wake up to a new normal of life | first1=David J. | last1=Lynch | first2=Thomas | last2=Heath | first3=Taylor | last3=Telford | first4=Heather | last4=Long | newspaper=[[The Washington Post]] | date=March 12, 2020 }}</ref> The S&P 500 and the Nasdaq each dropped by approximately 9.5%. The major European stock market indexes all fell over 10%.<ref>{{Cite news | url=https://www.theguardian.com/business/live/2020/mar/12/stock-markets-tumble-trump-europe-travel-ban-ecb-christine-lagarde-business-live | title=Wall Street and FTSE 100 plunge on worst day since 1987 – as it happened | first1=Graeme | last1=Wearden | first2=Jasper | last2=Jolly (now) | work=[[The Guardian]] | date=March 12, 2020}}</ref>

On March 16, 2020, after it became clear that a [[recession]] was inevitable, the DJIA dropped 12.93%, or 2,997 points, the largest point drop since [[Black Monday (1987)]], surpassing the drop in the prior week, the Nasdaq Composite dropped 12.32%, and the S&P 500 Index dropped 11.98%.<ref>{{Cite news | url=https://www.cnbc.com/2020/03/15/traders-await-futures-open-after-fed-cuts-rates-launches-easing-program.html |title=Dow drops nearly 3,000 points, as coronavirus collapse continues; worst day since '87 | last=Imbert | first=Fred |work=[[CNBC]] | date=March 15, 2020}}</ref>

By the end of May 2020, the stock market indices briefly recovered to their levels at the end of February 2020.{{Citation needed|date=July 2020}}

In June 2020 the Nasdaq surpassed its pre-crash high followed by the S&P 500 in August and the Dow in November.

=== 2025 stock market crash ===
{{Main|2025 stock market crash}}The '''2025 stock market crash''' was a major [[stock market crash]] in the [[United States]] which began on April 2, 2025 as a result of the [[Donald Trump's Liberation Day speech|worldwide tariffs]] put in place by US President [[Donald Trump]]. The crash is the largest decline in the US stock market since the [[COVID-19 pandemic]].<ref>{{Cite web |last=Singh |first=Brian Evans,John Melloy,Pia |date=2025-04-02 |title=Dow nosedives 1,600 points, S&P 500 and Nasdaq drop the most since 2020 after Trump's tariff onslaught |url=https://www.cnbc.com/2025/04/02/stock-market-today-live-updates-trump-tariffs.html |access-date=2025-04-04 |website=CNBC |language=en}}</ref>

On March 21, Trump announced "[[Donald Trump's Liberation Day speech|Liberation Day]]", a day meant for imposing universal  [[Tariffs in the second Trump administration|tariffs]] on all imported goods excluding pharmaceuticals, semiconductors, and lumber.<ref>{{Cite web |date=2025-03-31 |title=Trump has dubbed April 2 'Liberation Day' for his tariffs. Here's what to expect |url=https://apnews.com/article/trump-reciprocal-tariffs-liberation-day-april-2-86639b7b6358af65e2cbad31f8c8ae2b |access-date=2025-04-04 |website=AP News |language=en}}</ref><ref>{{Cite web |last=Saul |first=Derek |title=Here’s What To Know About ‘Liberation Day’—From Announcement Time To What Trump May Target |url=https://www.forbes.com/sites/dereksaul/2025/04/02/heres-what-to-know-about-liberation-day-from-announcement-time-to-what-trump-may-target/ |access-date=2025-04-04 |website=Forbes |language=en}}</ref> On April 2, Trump announced his trade policy with 10% tariffs on all imported goods, with additional [[Reciprocal Tariff Act|reciprocal tariffs]] targeting 90 countries such as China with a  34% tariff on all goods imported and a 20% tariff on all E.U imports. These measures took effect on April 9, 2025. The following day after this announcement  at the opening bell, the [[Dow Jones Industrial Average|Dow]] lost over 1,344.50 points and was down 3.22% and the [[S&P 500]] lost 176.96 points and was down 3.15%.      

Shortly after the tariffs were announced, the US stock market lost more than $3 trillion. By the second week of May 2025, the market had recovered.<ref>{{Cite web |title=U.S. Stocks Fall, Wiping Out More Than $3 Trillion in Market Value - What’s News - WSJ Podcasts |url=https://www.wsj.com/podcasts/whats-news/us-stocks-fall-wiping-out-more-than-3-trillion-in-market-value/88789957-d513-4f8b-8ed9-e32e7e0fa769 |access-date=2025-04-04 |website=WSJ |language=en}}</ref>