The Stock Market Crash of 1929

Name: The Stock Market Crash of 1929
Start: 1929-10-28
Location: Unspecified

The Start of a Financial Downturn

The 1929 Dow Jones Industrial Average Drop

On October 29, 1929, known as Black Tuesday, the Dow Jones Industrial Average experienced a dramatic drop, plummeting by 38.33 points, which equated to an alarming 13% decline, leaving the index at 260.64. This significant downturn marked the beginning of the Great Depression, a decade-long period of economic hardship that would affect millions.

The Events Leading Up to the Crash

The stock market saw unprecedented growth throughout the 1920s, creating a bubble that many believed would never burst. However, as investors grew reckless, speculation became rampant. Many people invested heavily on margin—meaning they only paid a fraction of the stock price upfront. When uncertainties began to arise in the economy, panic set in, leading to mass sell-offs that culminated on that fateful Tuesday.

The Aftermath of the Crash

The Ripple Effects on the Economy

The consequences of the 1929 market crash were far-reaching. Banks failed, businesses closed, and unemployment skyrocketed. By 1933, unemployment had reached around 25% of the workforce. The optimism of the previous decade was shattered, leading to a new reality of economic struggle.

Government Response to the Crisis

In response to the crash, the U.S. government implemented various measures aimed at stabilizing the economy. After much debate, the New Deal, introduced by President Franklin D. Roosevelt in the 1930s, aimed to provide relief and reform to the struggling populace. These programs sought to restore faith in the financial system and support those affected by the economic turmoil.

Fun Fact

A Notable Stock Market Myth

Many believe that the 1929 crash occurred only on Black Tuesday, but the decline actually began earlier, with significant drops in stock prices occurring during the preceding weeks, illustrating the intense panic and uncertainty gripping investors.