Black Monday (1987)

Black Monday, October 19, 1987, was the largest single-day percentage decline in the history of the Dow Jones Industrial Average. On that Monday the DJIA fell 508 points, or 22.6 percent, accompanied by crashes in the futures exchanges and options markets. Stock markets crashed worldwide, first in Asian markets other than Japan, then Europe, then the United States, and finally Japan, making it one of the first genuinely global market crashes of the era. The preceding five years had seen the S&P 500 index nearly triple, from 102.42 on August 12, 1982, to 336.77 on August 25, 1987, feeding a widespread sense that the market had become overpriced. The next day, October 20, the Federal Reserve, consistent with its responsibilities as the Nation's central bank, affirmed its readiness to serve as a source of liquidity to support the economic and financial system, a brief statement from newly seated Chairman Alan Greenspan credited with helping avert a wider financial crisis. In the aftermath, regulators overhauled trade-clearing protocols across major market products.