The 1987 Black Monday crash was the first major market collapse to trigger modern computerized trading safeguards.
On October 19, 1987, stock markets around the world fell sharply. The Dow Jones Industrial Average lost 22.6% in one session, its largest single-day percentage decline. Concerns about overvaluation, trade tensions, interest rates, and market mechanics combined with computerized portfolio-insurance selling to intensify the fall.
The crash exposed how automated sell programs could amplify an already declining market. In response, U.S. exchanges and regulators developed circuit breakers, which temporarily halt trading after specified market declines. These safeguards were designed to give investors time to assess information and reduce panic-driven feedback loops.
Black Monday is sometimes confused with October 28, 1929, also called Black Monday, or October 29, 1929, called Black Tuesday. The 1987 event is specifically identified by its year and by the worldwide scale of the decline. Unlike the 1929 crash, it was followed by a relatively rapid economic and market recovery.