The Dow Jones Industrial Average closed at 1,738.74 on October 19, 1987, after Black Monday.
That closing level represented a decline of 508.00 points, or 22.6%, in a single trading session. It was the largest one-day percentage fall in the Dow’s history. The selling was global: stock markets in Hong Kong, Australia, the United Kingdom, Canada, and other countries also suffered major losses.
The crash followed a long rise in U.S. share prices and occurred amid concerns about inflation, interest rates, international trade, and the dollar. Portfolio insurance and other computerized trading strategies may have accelerated the downward movement by generating additional sell orders as prices fell.
Despite the dramatic decline, the crash did not produce a depression on the scale of the 1930s. The U.S. Federal Reserve supplied liquidity, and the Dow eventually recovered its pre-crash closing level in 1989. The episode led regulators and exchanges to develop circuit breakers and other mechanisms designed to slow extreme market moves.