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Significant World Events that Shook the US Stock Market

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September 6, 2023


What’s Inside

In the bustling US financial landscape, certain market events emerge as game-changers, igniting stock market rallies and shaping market sentiment. Although they are not common, the impact of huge market events on stocks can be monumental.

Let’s delve into the dynamics, impacts, and insights that define the aftermath of such occurrences in the past.

Key Events That Impacted The US Stock Market: A Closer Look






Great Depression


Speculative bubble, credit contraction

Unemployment, economic downturn

Financial regulations, reforms

Black Monday


Computerised trading, rising rates

Sharp correction, stabilisation

Enhanced market circuit breakers, reforms

Dot-Com Bubble Burst


Overvaluation, speculative trading

Technology stock decline

Valuation reevaluation, focus on fundamentals

Global Financial Crisis


Subprime crisis, excessive risk-taking

Bank failures, recession

Regulatory reforms, financial stabilisation

COVID-19 Pandemic


Global pandemic impact, uncertainties

Rapid stock declines, interventions

Global stimulus, gradual market recoveries

The Great Depression

  • Black Tuesday, October 29, 1929 marked the onset of the Great Depression.
  • The post-World War I crash was triggered by the bursting of a speculative bubble followed by credit contraction.
  • The catastrophic impact included massive unemployment, widespread business failures, and a severe economic downturn.
  • The aftermath of this event brought about significant financial reforms that laid the foundation for stringent financial regulations.

Black Monday

  • On October 19, 1987, the US stock market witnessed what is now known as Black Monday.
  • The Dow Jones Industrial Average plummeted by over 22% in one day.
  • The crash was attributed to factors such as errors in computerised trading, rising interest rates, and an overvalued market.
  • Fortunately, the effects were relatively short-lived, and the market eventually stabilised.
  • Measures were implemented to improve trading mechanisms to prevent a similar massive drop in a single day.

Bursting of the Dot Com Bubble

  • The market crash between 2000 and 2002 was triggered by factors including the overvaluation of technology stocks, speculative trading, and unrealistic growth expectations in the sector.
  • The Dot-Com Bubble Burst led to a decline in technology stocks and significant losses for investors in tech companies.
  • In its aftermath, a market correction happened.
  • Focus on fundamental analysis gained prominence as investors reevaluated their investment strategies.

Global Financial Crisis

  • The collapse of Lehman Brothers in September 2008 led to a severe economic recession.
  • The crisis was primarily caused by the subprime mortgage crisis and excessive risk-taking in the housing market.
  • It resulted in the failure of major banks, the collapse of the housing market, widespread unemployment, and a global recession.
  • The aftermath of the crisis prompted comprehensive regulatory reforms.
  • Financial institutions faced increased scrutiny, and efforts were made to stabilize financial markets and restore investor confidence.

COVID-19 Pandemic

  • The COVID-19 pandemic in early 2020 led to sharp declines across market indices.
  • The impact of this huge event on stocks and global economies caused disruptions in supply chains and a rapid decline in the markets.
  • With the help of Governments and central banks, stock markets displayed resilience and saw gradual recoveries as vaccination efforts gained momentum.

So, What Have We Learned?

Each of the listed events underscores the importance of detailed stock market analysis, prudent risk management, and rigorous regulatory oversight. It also shows us that the market eventually bounces back. After all, the US is still the largest economy in the world. So, one should avoid making panic-induced decisions and stay invested in well-researched stocks for the long haul.

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Frequently Asked Questions

1. What was the huge market event on stocks, and what caused it?

The recent event was the COVID-19 pandemic, causing global market turmoil. Lockdowns, disruptions, and uncertainties triggered sharp declines in stocks worldwide.

2. How did the stock market respond to this event and what were its immediate effects on investors?

The market experienced rapid declines as fear spread. Circuit breakers were triggered, and investor confidence plummeted due to the uncertainty surrounding the pandemic's impact.

3. What are the long-term effects of this market event on the economy and financial markets?

Long-term effects include changes in consumer behaviour, remote work trends, digital transformation acceleration, and shifts in industries' resilience and growth trajectories.

4. How did different sectors and industries fare during and after the event?

Sectors like technology, healthcare, and e-commerce proved more resilient, while travel, hospitality, and traditional retail faced severe setbacks. Recovery varied based on adaptability.

5. How did investors navigate market event volatility and uncertainty after huge impacts?

Investors diversified portfolios focused on quality companies, increased cash holdings, and stayed informed about government interventions and vaccine developments.


Investment and securities are subject to market risks. Please read all the related documents carefully before investing. The contents of this article are for informational purposes only, and not to be taken as a recommendation to buy or sell securities, mutual funds, or any other financial products.
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