What 2008 crisis caused stock markets worldwide to plunge after the US housing bubble burst?

The 2008 crisis that caused stock markets worldwide to plunge after the US housing bubble burst was the Global financial crisis.

The crisis grew from weaknesses in US housing finance, especially the expansion of subprime mortgages and complex securities linked to them. When house prices fell and mortgage defaults increased, the value of mortgage-related assets became uncertain. Banks and other financial institutions faced losses, funding pressure, and falling confidence.

A decisive moment came on 15 September 2008, when Lehman Brothers filed for bankruptcy. The failure intensified a global credit freeze and helped send equity markets sharply lower. Governments and central banks responded with emergency lending, bank rescues, guarantees, and interest-rate cuts.

The crisis produced the Great Recession, the deepest worldwide downturn since the Great Depression. It is often called the 2008 financial crisis, but its effects began before 2008 and continued afterward. Stock-market losses were one part of a wider banking, housing, and economic crisis.