The Dow Jones Industrial Average lost about 45% from its 1973 peak to its 1974 low. The decline formed part of the severe 1973–1974 stock-market crash, one of the major bear markets of the postwar era.
The downturn followed the end of the long postwar expansion and coincided with high inflation, slowing economic growth, and the 1973 oil crisis. In October 1973, Arab oil-exporting states imposed an embargo on several countries, contributing to a sharp increase in energy prices. Investors also faced political uncertainty and deteriorating corporate conditions.
The Dow’s decline was accompanied by weakness in other major markets, including the United Kingdom and Japan. Although the market eventually recovered, the episode helped shape the financial environment of the 1970s, which was marked by “stagflation”—the combination of stagnant growth and high inflation. The 45% figure refers to the Dow’s peak-to-trough fall, not a single trading day or a one-year percentage change.