**Article:**
On October 19, 1987, global stock markets experienced a sudden and severe downturn, an event now known as Black Monday. The Dow Jones Industrial Average in the United States plummeted by 22.6%, marking the largest single-day percentage drop in its history. This dramatic decline was mirrored in markets worldwide, including the United Kingdom, where the FTSE 100 also suffered significant losses.
The causes of the crash were complex, involving a mix of economic factors, market psychology, and automated trading systems. Despite the sharp fall, markets gradually stabilized in the following weeks, and the crash did not lead to a prolonged economic recession. The event prompted regulators and market participants to review trading practices and risk management strategies.
**Why this matters:**
Black Monday remains a pivotal moment in financial history, highlighting vulnerabilities in market structures and the impact of computerized trading. It led to improvements in market safeguards, such as circuit breakers, designed to prevent similar rapid sell-offs. Understanding this event helps investors and regulators better prepare for future market disruptions.
Source: NewsData