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The Stock Market Crash of 1929 saw huge drops in US stock markets, beginning on October 24 and culminating on Black Tuesday, October 29. After the crash, stock prices continued to fall for three years, leading to the Great Depression. Rising stock values drew many Americans into the market, but despite concerns, many believed prices could rise indefinitely. Black Thursday, October 24, is considered the beginning of the crash, and Black Tuesday saw panic and record trading volume. The crash is often considered to have started the Great Depression.
The Stock Market Crash of 1929 was a series of huge drops in the value of US stock markets. The major events began on October 24, 1929 and culminated on Black Tuesday, October 29, 1929. Black Tuesday has become an infamous day in the history of the market when investors lost huge amounts of money. After the crash, stock prices continued to fall for the next three years as the United States, and eventually the world, slipped into the Great Depression.
In the 1920s, many Americans enjoyed an increasing level of prosperity, although wages rose slowly for many and farmers suffered greatly from falling farm commodity prices. In the period from 1925 to 1929, the average price of shares on the New Exchange more than doubled. Rising stock values drew many Americans into the stock market, buying and expecting to sell later as prices continued to rise.
Despite the concern of some economists, many believed that stock prices could rise indefinitely. A respected economist said that stock prices had reached a “permanently high plateau” shortly before the crash began. Indeed, stock prices had risen over the summer.
A drop in prices on Oct. 19 has investors worried for the next two weeks. Black Thursday, October 24, is usually considered the beginning of the stock market crash of 1929. Although prices initially held steady during high trading volume, the panic began to set in at 11 a.m. and lasted until at midday. In the early afternoon, news of a move to stable share prices quickly prevented prices from falling. A phenomenal rally in the afternoon meant that the industrial average only lost 12 points on the day.
Share prices were mostly stable during the morning trading sessions on 25th and 26th October. Then, the continued sell-off on Monday the 28th wiped out billions in stock values. Just before market close that day, further steep declines in the stock had many wary of what was to come when the markets opened on Tuesday morning.
When the markets opened on Black Tuesday, panic was rife and the floor of the Stock Exchange was in a frenzy. The trading volume broke the record that was set on Black Thursday. Billions more have been written off the value of stocks, ruining many investors and causing others to lose huge investments. Nearly five times the amount of the US budget, then 3 billion US dollars (USD), was written off the market value during the crash.
The stock market crash of 1929 was only the beginning of a much worse and much more widespread economic downturn. Stock values continued to fall into the early 1930s. While opponents debate whether the 1929 stock market crash directly caused the Great Depression, it is often considered to have started it.
