Black Monday is the nickname for the sudden worldwide stock-market collapse on October 19, 1987. The Dow Jones Industrial Average plunged 22.6% that day, while major markets in Europe, Asia, and elsewhere also suffered severe losses.
The name is shared with other financial events, which can cause confusion. Black Monday in 1987 is distinct from Black Monday in 1929, the October 28 session during the Wall Street Crash. It is also distinct from Black Tuesday, October 29, 1929, when U.S. markets suffered another historic collapse.
Several explanations have been offered for the 1987 event. These include high equity valuations, concerns about interest rates and international trade, and computerized portfolio-insurance systems that generated automatic sell orders as prices declined.
Despite the dramatic fall, the financial system did not experience the prolonged depression associated with the 1930s. Central banks supplied liquidity, and regulatory reforms later introduced trading halts intended to slow panic-driven selling.