The 1987 crash’s largest one-day fall in the Dow Jones Industrial Average was nicknamed Black Monday.
On October 19, 1987, the Dow lost 508 points, equivalent to 22.6% of its value. The percentage decline was far greater than the point loss suggests because the index stood at a much lower level than it does in later decades. Similar collapses occurred in markets including Hong Kong, the United Kingdom, Australia, and Canada.
The crash followed a period of rising prices and concern about interest rates, trade imbalances, and slowing economic growth. Program trading and portfolio insurance were widely blamed for accelerating the downward spiral. These systems could generate substantial sell orders as prices fell, adding pressure to an already nervous market.
Black Monday is distinct from the 1929 Black Tuesday and from the 1962 downturn sometimes called the Flash Crash. After 1987, exchanges introduced mechanisms such as circuit breakers to temporarily halt trading during extreme price movements.