A screen shows the Dow Jones Industrial Average on the floor of the New York Stock Exchange

Three decades ago the Dow Jones dropped more than 20% in just one day. Could it happen again?

22.6%

On Oct. 19, 1987, the Dow Jones Industrial Average plunged 22.6% in a single day.

Published   |  Photo by Reuters/Brendan McDermid
A screen shows the Dow Jones Industrial Average on the floor of the New York Stock Exchange
22.6%

It was the worst decline in the history of the index. There have been other declines since, but even during the 2008 financial crisis, the index never fell more than 10%.

A screen shows the Dow Jones Industrial Average on the floor of the New York Stock Exchange
22.6%

“Black Monday” started with declines in Asia, which in turn caused drops in Europe, and then ended up hitting New York.

A screen shows the Dow Jones Industrial Average on the floor of the New York Stock Exchange
22.6%

A screen shows the Dow Jones Industrial Average on the floor of the New York Stock Exchange
22.6%

A drop in oil prices, a slowing US economy, and tensions between the US and Iran contributed to the uncertainty that caused the crash.

A screen shows the Dow Jones Industrial Average on the floor of the New York Stock Exchange
22.6%

But computerized trading also played a key role. When the market began to fall, the algorithms automatically started dumping stocks, causing a cascade of declines.

A screen shows the Dow Jones Industrial Average on the floor of the New York Stock Exchange
22.6%

A screen shows the Dow Jones Industrial Average on the floor of the New York Stock Exchange
22.6%

Stocks are once again hitting records in 2017. If a similar crash happens again, things would probably be more orderly, due to circuit breakers that halt trading if declines hit certain levels.

Published

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