Which commodity-price shock helped start the 1973–1974 stock-market crash?

The commodity-price shock that helped start the 1973–1974 stock-market crash was the 1973 oil crisis.

In October 1973, Arab members of OAPEC announced an oil embargo against countries viewed as supporting Israel during the Yom Kippur War. Oil prices rose dramatically, contributing to inflation, energy shortages, and weaker economic growth in many industrial countries. The shock struck markets already worried about the end of the postwar boom and monetary instability.

The S&P 500 declined about 48 percent from its January 1973 peak to its October 1974 low. The period is often described as a combination of inflation and stagnation, or “stagflation.” The 1979 oil crisis was a later energy shock and should not be substituted for the event linked to the initial 1973 market collapse.