What was the worst crash in the stock market?

The worst stock market crash happened in 1929. It produced the largest decline from top to bottom (89%) and was a catalyst for the Great Depression.

What was the worst day in stock market history?

On a percentage basis, the worst day in stock market history was on Oct. 19, 1987. The S&P 500 plunged 20.5% while the Dow cratered 22.6%. Meanwhile, the biggest point decline came on March 16, 2020. The Dow fell 2,977 points (12.9%), while the S&P 500 fell 324.9 points (12%).

What was the fastest market crash in history?

The fastest market crash in history came on Oct. 19, 1987. The S&P 500 and Dow Jones Industrial Average each plunged more than 20% in a single day, the biggest single-day percentage decline in history.

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A History of U.S. Stock Market Crashes

By Matthew DiLallo – Updated May 10, 2026 at 1:08 PM EST | Fact-checked by Parker Hicks

Key Points

Stock market crashes often follow debt-fueled economic expansions.
Rapid sell-offs can result from automated trading or external crises.
Significant financial interventions can help accelerate post-crash recoveries.

A stock market crash occurs when stock prices decline significantly. There's no specific definition of a stock market crash, but the term usually applies to periods when major stock market indexes lose more than 10% of their value in a short period.

Market crashes typically happen without warning, often on the heels of a long bull market run during which stock prices steadily rise. The hallmark of a stock market crash is panic selling by investors who try to quickly liquidate their positions to either curb losses or satisfy a margin call.

Although a stock market crash can occur quickly, many of the market's biggest crashes have had long-lasting, deep effects. Here's a brief look at some of the stock market's most notable crashes.

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Visual timeline of the biggest crashes in stock market history: 1929, 1987, 1999, 2008, 2020. — Image source: The Motley Fool.

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1929 stock market crash

The worst stock market crash in history started in 1929 and was one of the catalysts of the Great Depression. The crash abruptly ended a period known as the Roaring Twenties, during which the economy expanded significantly, and the stock market boomed.

The Dow Jones Industrial Average (^DJI -1.07%) rose from 63 points in August 1921 to 381 points by September 1929 -- a sixfold increase. It began its price tumble from its peak on Sept. 3, then accelerated during a two-day crash on Oct. 28-29. On Black Monday, the Dow tumbled almost 13%, and on Black Tuesday, it fell another nearly 12%.

By mid-November 1929, the Dow had lost about half its value. The stock market was in a bear market, meaning its value had declined by more than 20%. The Dow continued to lose value until the summer of 1932, when it bottomed out at 41 points, a stomach-churning 89% below its peak. The Dow didn't regain its pre-crash value until 1954.

The primary cause of the 1929 stock market crash was excessive leverage. Many individual investors and investment trusts had begun buying stocks on margin, paying only 10% of the stock's value to acquire it under a margin loan. The investment trusts also often purchased shares of other highly leveraged investment trusts, making the trusts' fates highly intertwined. Consumers, too, increasingly purchased items on credit. When the debt bubble burst, it caused the greatest stock market and economic crash in modern history.

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Bank Run

When a large volume of deposits is withdrawn from a bank in a short period of time.

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Black Monday crash of 1987

On Monday, Oct. 19, 1987, the Dow Jones Industrial Average plunged almost 22%. It was the biggest single-day decline in stock market history. The remainder of the month wasn't much better: By the start of November 1987, most of the major stock market indexes had lost more than 20% of their value.

No single event caused the stock market to crash in 1987. Instead, a series of factors drove the sell-off, including a widening U.S. trade deficit, computerized trading, and tensions in the Middle East. The rise of program trading, in which computers make automated trades, likely played the biggest role in this crash. The computers tended to issue more buy orders when prices were rising and more sell orders when prices were falling. As sell orders flooded the market on Oct. 19, other investors panicked and sold as well.

Because the crash was caused primarily by programmatic trading rather than an economic problem, the stock market recovered relatively quickly. The Dow started rebounding in November 1987 and had recouped all its losses by September 1989.

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Dot-com bubble of 1999-2000

During the late 1990s, the values of internet-based stocks rose sharply. As a result, the technology-dominated NASDAQ Composite index (^IXIC -1.54%) surged from 1,000 points in 1995 to more than 5,000 in 2000. But in early 2001, the dot-com stock bubble started to deflate. The Nasdaq peaked at 5,048.62 points on March 10. The index would go on to plummet by 76.81% to a low of 1,139.90 points on Oct. 4, 2002.

The primary cause of the crash was overvalued internet stocks. Many investors speculated that dot-com companies -- even those without revenue -- would one day become extremely profitable. As a result, they poured money into the sector, driving up the valuation of every company with "dot-com" in its name. The stock market bubble burst when the Federal Reserve Board tightened its monetary policy by raising the federal funds rate, constraining the flow of capital. The Nasdaq did not regain its 2001 peak until almost 15 years later.

Financial crisis of 2008

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Foreclosure sign in front of house. — Image source: Getty Images.

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In 1999, the Federal National Mortgage Association (FNMA or Fannie Mae) wanted to make home loans more accessible to those with low credit ratings and less money to spend on down payments than lenders typically required. Lenders offered these subprime borrowers mortgages with payment terms that reflected their elevated risk profiles, such as high interest rates and variable payment schedules.

This increased availability of mortgage debt appealed to both previously ineligible borrowers and investors, fueling explosive growth in mortgage originations and home sales. At the same time, consumers -- many of them new homeowners -- took on additional debt to buy other goods. Companies seeking to capitalize on the opportunities afforded by the surging economy also borrowed heavily. Additionally, financial institutions used cheap debt to boost the returns on their investments.

The debt-fueled stock market began to show signs of an impending collapse in March 2007, when the investment bank Bear Stearns was unable to cover losses tied to subprime mortgages. Bear Stearns' failure was not, by itself, enough to cause the stock market to crash -- it kept rising to 14,164 points on Oct. 9, 2007 -- but by September 2008, the major stock indexes had lost almost 20% of their value. The Dow didn't reach its lowest point, which was 54% below its peak, until March 6, 2009. It then took four years for the Dow to fully recover from the crash.

COVID-19 crash of 2020

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Chart showing the effect of the coronavirus on the economy — Image source: Getty Images.

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The most recent stock market crash occurred in 2020 as the COVID-19 pandemic spread worldwide. During the week of Feb. 24, the Dow Jones Industrial Average and the S&P 500 tumbled 11% and 12%, respectively, marking the biggest weekly declines since the 2008 financial crisis. The Dow would go on to decline by 9.99% on March 12 -- its largest one-day drop since 1987 -- followed by an even deeper plunge of 12.9% on March 16.

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However, unlike with previous crashes -- which took years to recover their previous peaks -- the stock market rebounded quickly, reaching its pre-pandemic peak by May 2020. Fueling the rapid recovery was an enormous amount of stimulus. The Federal Reserve slashed interest rates and injected $1.5 trillion into money markets, while Congress passed a $2.2 trillion aid package at the end of March.

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Lessons to learn from the biggest stock market crashes in history

Investors can learn several valuable lessons from studying stock market crashes. A notable one is that they usually follow a debt-fueled boom. Given the devastating potential of market crashes, investors should avoid using margin debt, as it can make them even worse.

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FAQ

FAQ on U.S. Stock Market Crashes

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About the Author

Matt DiLallo has been a contributing Motley Fool stock analyst specializing in the energy, industrials, and real estate sectors since 2012. He also covers dividend-paying stocks, pre-IPO companies, ETFs, and other investing topics. He holds an MBA from Liberty University.

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@MatthewDiLallo

Matt DiLallo has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

A History of U.S. Stock Market Crashes

Key Points

1929 stock market crash

Bank Run

Black Monday crash of 1987

Dot-com bubble of 1999-2000

Financial crisis of 2008

COVID-19 crash of 2020

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1929 stock market crash

Bank Run

Black Monday crash of 1987

Dot-com bubble of 1999-2000

Financial crisis of 2008

COVID-19 crash of 2020

10 Best Inflation-Proof Investments for 2026

3 Most Important Financial Statements

Different Types of Stocks to Invest In and How to Choose the Right Ones

S&P 500 Explained: How the Index Works and How to Invest in It

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FAQ on U.S. Stock Market Crashes

What was the worst crash in the stock market?

What was the worst day in stock market history?

What was the fastest market crash in history?