Japanese stocks suffered their biggest ever daily loss on August 5th, as fears about a US economic slowdown sent shock waves through global markets. The Black Monday saw Wall Street stocks plunged as trading began amid intensifying concerns that the US economy is heading for a recession. The Nasdaq Composite plummeted by 6.4%, following a 2.4% fall on Friday as panic about a global economic downturn gripped markets. Meanwhile, the Dow Jones Industrial Average fell 2.7%, while the broader S&P 500 sank by 4.2%. US stocks followed sharp sell-offs in Europe, where the FTSE 100 fell 2.8% and the DAX in Germany dropped 3.3%.
The Nikkei 225 index of leading stocks in Tokyo lost a staggering 4,451 points, its biggest drop in history. The index closed more than 12% down, taking its losses since early July to 25% and entering bear market territory. Social media quickly reacted to the historic drop. Indie filmmaker Michael Roland Williams took to X (formerly Twitter) to share a personal story.
“My dad’s friend returned home on Black Monday in 1987 and killed himself. I remember people jumping out of windows and offing themselves in various ways. Remember, it’s only money. Take care of yourselves.” Roland was referring to the infamous “Black Monday” in October 1987, when global markets plunged and the Nikkei lost 3,836 points.
Author and trader Simon Ree also commented on the situation:
“The sheer amount of fear and panic generated by what was, as of Friday, a 5.7% pullback from all-time highs in the $SPX – which was still up +13% YTD, mind you – tells you all you need to know about how crowded positioning was.”
What Years Did the Stock Market Collapse?
The stock market has experienced several significant collapses throughout history, each marking a period of severe economic turmoil. The most infamous crash occurred in 1929, marking the beginning of the Great Depression. On October 29, 1929, known as Black Tuesday, the stock market collapsed, leading to widespread decade-long economic depression.
Another notable crash happened on October 19, 1987. Referred to as Black Monday, stock markets around the world plummeted, with the Dow Jones Industrial Average falling by 22.6% in a single day.
More recent collapses include the dot-com bubble burst in 2000 and the global financial crisis in 2008. The 2008 collapse was triggered by the subprime mortgage crisis, leading to a severe global recession.
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