Black Monday is the common nickname for the most dramatic trading day of the 1987 global stock-market crash.
On October 19, 1987, stock markets around the world suffered extraordinary losses. The Dow Jones Industrial Average fell 22.6 percent in a single session, its largest one-day percentage decline. Markets in other countries also dropped sharply, showing how increasingly connected international finance had become.
Several factors were associated with the crash, including high valuations, economic concerns, international trade tensions, and computerized trading practices. Portfolio insurance strategies were designed to limit losses, but their automatic selling could add pressure when prices began to fall. The exact combination of causes remains a subject of financial-history discussion.
The crash did not produce a depression comparable to the 1930s. Central banks and financial institutions responded quickly, and the U.S. economy continued expanding for several years. The episode nevertheless led regulators and exchanges to strengthen circuit breakers, which can temporarily halt trading during unusually rapid market declines. Black Monday is distinct from the 1929 Black Tuesday and the 1987 crash’s other difficult sessions.