Black Monday on 19 October 1987 produced a 22.6% one-day fall in the Dow Jones Industrial Average, the largest percentage decline in its history.
The crash was part of a worldwide market collapse. Stock exchanges in Asia and Europe had already fallen sharply, and selling intensified when trading opened in the United States. The Dow lost 508 points, which was enormous relative to its level at the time.
Several forces contributed, including high share valuations, rising interest rates, uncertainty over the dollar, and automated portfolio-insurance selling. Computer-driven strategies could amplify falling prices by placing more sell orders as markets weakened.
The 1987 crash is often confused with the 1929 crash because both are called “Black” market days. However, the 1987 fall was much larger in percentage terms for the Dow. Regulators later introduced circuit breakers and other mechanisms intended to slow trading during extreme volatility.