During the Black Monday crash of 1987, the Dow Jones Industrial Average fell 22.6% in one trading session.
The plunge occurred on October 19, 1987, when stock markets around the world dropped sharply. The Dow lost 508 points, then the largest one-day point decline in its history. The percentage loss was more important than the point total because it measures the fall relative to the index’s starting level.
Several factors were associated with the crash, including high valuations, worries about interest rates and trade deficits, and computerized trading strategies. Portfolio insurance programs could generate additional sell orders as prices fell, intensifying the downward movement. The exact combination of causes remains debated by economists.
Black Monday was not followed by a depression like the 1929 crash. The U.S. economy continued to expand, and the Dow eventually recovered. Modern market safeguards, including circuit breakers, were developed partly in response to the extreme volatility seen that day.