Black Monday
1987-10-19
An event in which US equities plunged in a single day and the shock spread to international markets.
Based on the announcement or occurrence date. It does not stand for the start or end of subsequent phases.
Conditions at the time
After an earlier rally, accumulated selling in mid-month 10 increased market anxiety.
How events unfolded
On 10/19, the Dow fell 22.6%. The next day, the Federal Reserve expressed its willingness to provide liquidity support.
Stakeholders and impacts
Equity holders, securities firms, and settlement and funding institutions faced price declines and liquidity pressure.
Information available at the time
The crash and support announcements were observable at the time, but the contribution of trading structures was a subject for subsequent research.
Findings confirmed later
Portfolio insurance and settlement structures were analyzed as factors amplifying the shock.
Alternative interpretations and limitations
The crash should not be attributed conclusively to a single trading technique. A daily change in the Dow price index differs from total returns across the entire market.
Interpretation using later sources
The crash and the Fed's liquidity statement the next day were observable at the time. A later Federal Reserve history essay describes additional selling from portfolio insurance and mismatched settlement timing across stocks and derivatives as amplifiers. Price losses and settlement funding shortages should therefore be distinguished. Subsequent trading-halt rules changed the response; they neither establish a single cause nor guarantee protection against future losses.
Evidence coverage through 2013-11-22 · Sources checked 2026-10-14
Related events and periods1
- Disinflation and expanding financial-market connections
An event or period whose recorded start falls within this editorial interval. This does not establish that it caused or represents the characteristics of the era, nor guarantee that the entire period falls within the interval.
Historical events do not guarantee future recurrence or investment performance.