Unprecedented Red Alert in the Stock Market
Unprecedented Red Alert in the Stock Market
Stock markets in Asia and Europe plummeted on Monday, April 6th, following China’s retaliatory response to severe U.S. tariffs, reviving memories of market turmoil after the COVID-19 pandemic and the last global financial crisis. Analysts have described Monday’s cascade of declines as historic, with some even referring to it as a bloodbath, recalling previous collapses since the beginning of the last century. Read a list of previous stock market crises in a report from Agence France-Presse.
Year 2020: Coronavirus Pandemic
After the World Health Organization declared COVID-19 a pandemic on March 11, 2020, global stock markets plunged and much of the world went into lockdown. On March 12, a day after this announcement, the Paris stock exchange fell 12%, Madrid 14%, and Milan 17%.
London with 11% and New York with 10% witnessed their worst falls since 1987 up to that point.
Further declines occurred in the following days, and U.S. stock market indices fell by more than 12%. The swift response of national governments striving to keep their economies afloat helped markets return to normal within a few months.
Year 2008: Subprime Mortgage Crisis
The global financial crisis of 2008 was triggered by bankers in the United States who granted subprime mortgages to people in shaky financial conditions and then sold them as investments, fueling a housing market bubble. When borrowers failed to repay their loans, millions lost their homes, the stock market crashed, and the banking system froze, peaking with the spectacular bankruptcy of investment bank Lehman Brothers. From January to October of that year, major stock markets around the world fell between 30% and 50%.
Year 2000: Dot-com Bubble
The start of the new millennium witnessed the bursting of the tech company bubble, driven by venture capitalists pouring money into inexperienced companies. The Nasdaq index in New York began its decline on March 10, 2000, losing 39.3% of its value over the year. Many internet startups went bust.
Year 1987: Black Monday
Stock indices on Wall Street fell on October 19, 1987, due to large trade and budget deficits in the United States and rising interest rates. The Dow Jones index dropped 22.6%, causing panic in markets worldwide.
Year 1929: Wall Street Crash
October 24, 1929, is known as Black Thursday on Wall Street, when, following the bursting of a market bubble, the Dow Jones lost more than 22% of its value at the start of trading. Stock indices recovered most of their losses during the day, but the genie was out of the bottle. Wall Street also witnessed major losses on October 28 and 29, marking the beginning of the Great Depression in the United States and triggering a global economic crisis.