Black Monday 1987: What Happened, Why, and Was It the Worst Day Ever? (Dow -22.6%)

On Monday, October 19, 1987, the Dow fell 508 points, or 22.6%, its worst one-day percentage drop since the index began in 1896. In the three days before, it had already lost 10.4% after a bigger-than-expected trade deficit and a House bill on takeover tax breaks. A presidential task force pointed to portfolio insurance, though regulators came to different conclusions. Before Tuesday's open the Fed said it stood ready to provide liquidity; the Dow won back more than half the loss in two days and still ended 1987 up about 2%. For the Nasdaq, March 16, 2020 was worse.