Black Monday caused the largest one-day percentage fall in the S&P 500, when the index dropped 20.47% on October 19, 1987. The decline was part of a worldwide stock-market crash that affected the United States, Europe, Hong Kong, Australia, and other markets.
Investors and researchers have identified several contributing factors, including high valuations, rising interest rates, trade and currency concerns, and computerized portfolio-insurance strategies. Those automated trading methods could generate more selling as prices fell, adding pressure during an already fragile session.
The crash differed from 1929 in important ways. The U.S. economy did not enter a Great Depression after 1987, and the market later recovered. The Federal Reserve, led by Chairman Alan Greenspan, issued a statement emphasizing its readiness to serve as a source of liquidity. Exchanges also introduced circuit breakers and other safeguards designed to slow trading during extreme declines.