Black Tuesday, on October 29, 1929, saw the New York Stock Exchange lose billions of dollars, with the Dow Jones Industrial Average dropping nearly 13%. The stock market crash caused hysteria, leading to the loss of fortunes and even lives. It marked the onset of the Great Depression and led to the passing of the Glass-Stengall Act of 1933.
Black Tuesday, the day billions of dollars were lost on the New York Stock Exchange, occurred on October 29, 1929. The Dow Jones Industrial Average dropped nearly 13% on Black Tuesday. The stock market crash created hysteria, causing thousands to lose their fortunes and even cause some people to die. Black Tuesday is an event that many historians believe ushered in the onset of the Great Depression.
During the 1920s, the US economy was robust. In early September 1929, the Dow Jones Industrial Average was at an all-time high of 381. Stock prices continued to rise. Towards the end of October, however, things started to take a turn for the worse for the market. People started selling stocks frantically, and on October 23, 1929, the stock market crashed by more than XNUMX%.
On October 28, 1929, more and more investors began withdrawing their money from the stock market. In an effort to quell the panic, banks and investment firms bought large blocks of stock, but the measure didn’t work. In less than a week, shares are down more than $26 billion, with more than 30 million shares traded.
On Black Tuesday alone, $14 billion was lost on the stock market, as investors sold shares while no one bought them. That day, the market closed at 230.07. Not helping matters, trading volume was so heavy that stock tickers lagged by more than an hour, wreaking havoc.
Black Tuesday marked the end of a six-year bull run in the stock market. With so many investors attempting to exit the market at the same time, a national alarm was triggered. Black Tuesday created a domino effect, as investors who bought stocks with borrowed money were unable to repay the money owed to the banks, causing many financial institutions that lent the money to go bankrupt.
After the crash, the stock market continued to spiral, and about $30 billion in stock value was lost in November 1929. It took the US economy more than a decade to recover from the stock market crash of 1929. The crash ushered in the advent of new programs and laws to build confidence in the US economy and regulate the stock market. Because of Black Tuesday, the Glass-Stengall Act of 1933 was passed, establishing the Federal Deposit Insurance Company.
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