Black Monday, October 28, 1929, was the largest one-day percentage drop in the Dow Jones Industrial Average before Black Monday in 1987. The Dow declined 12.8% during that session.
The fall came after weeks of market weakness following the speculative boom of the 1920s. On the next day, Black Tuesday, the Dow dropped another 11.7%, and the combined decline deepened public fear. Newspapers and later histories often focus on Black Tuesday, but Black Monday produced the larger percentage loss of the two.
The 1929 crash unfolded in a market with widespread buying on margin. Investors borrowed money to purchase shares, so falling prices could force them to provide more cash or sell holdings. Forced selling increased pressure on prices and contributed to the collapse of confidence.
The crash was a major beginning of the Great Depression’s financial phase, but it was not an instant explanation for the entire decade-long downturn. Bank failures, deflation, unemployment, lower production, and international economic problems made the depression much broader than the stock-market event itself.