The Dow Jones nosedived Monday and suffered its worse single-day point drop in history, according to media reports.
The record 3,000-point drop was also the second-biggest one-day percentage drop in Dow Jones history, according to Bloomberg’s Jon Erlichman. Only on Oct. 19, 1987 — a day known as Black Monday — has there been a more severe single-day decline on a percentage basis.
Monday’s 12.93 percent drop was worse than Oct. 28 and 29, 1929 — days that led to the Great Depression. It was the second major decline in the last week. Thursday’s 9.99 percent drop was the fifth-highest drop in history.
The stock market tumble came as the coronavirus pandemic spread in the U.S., prompting President Donald Trump to unveil a 15-day plan that asks Americans to refrain from gathering with 10 or more people, avoid discretionary travel and not dine out. He said the country could be dealing with the virus into July or August.
The stock market’s plunge came a day after the Federal Reserve cut interest rates to a range of 0 percent.
“The market didn’t hear what It wanted to hear,” strategist Liz Young said on CNBC. “I don’t think that it wanted to hear that this was going to last until July and August, and now that market does the math. If It lasts until July and August, that means we maybe have a contraction in the second quarter and third quarter, and that means recession.”
Trump said Monday the country “may be” heading Into a recession, according to the Associated Press.
The country can take lessons from other significant declines on the stock market, including Black Monday in 1987. The Dow Jones dropped 22.6 percent on the infamous 1987 date amid a flurry of fears.
“Heightened hostilities in the Persian Gulf, fear of higher interest rates, a five-year bull market without a significant correction and computerized trading” all played significant roles in the 1987 crash, Time reported.
The stock markets recovered 57 percent of its losses in the next two trading sessions but took two years to fully recover, according to the Federal Reserve History.
The Dow had consecutive drops of 11.73 percent and 12.82 percent on Oct. 28 and 29, 1929, days that coincided with the beginning of the Great Depression, according to Erlichmann.
An “economic slowdown” and large investors realizing their stocks were inflated in value led to the 1929 Wall Street crash. It took the Dow 25 years to regain its 1929 highs, according to Business Insider.
The S&P 500 was at a record high a month ago but has plummeted nearly 30 percent since, according to the Associated Press.
“It’s impossible to say when and how we’re going to reach bottom,” Danielle DiMartino Booth, chief executive officer of Quill Intelligence, told the AP.