Halloween for Investors: A Look at 10 of Wall Street’s Scariest Moments

With Halloween approaching this weekend, we offer our own seasonal-themed blog: a look at 10 of the scariest moments in market history. Notably, many of the events occurred in October.

While the list was compiled only for the spirit of the season, we hope it also provides perspective: “scary” market events are an inevitable part of investing. But with a long-term view, and perspective that volatility is part of the process, we hope you stay the course through future volatility.

Now, for a look at a few past events that were most frightening:

March 9, 2020: This date is still recent in everyone’s memory. As concerns about COVID-19 caused governments to shut down economic activity, stocks reacted quickly. The Dow dropped nearly 8%, and would experience even larger single-day losses later that month.

July 18, 2013: The date is more notable for fixed income investors, as Detroit’s $18 billion bankruptcy marked the largest municipal bankruptcy in U.S. history.

May 6, 2010: Markets were only scary for a little over half an hour, but this date marks the famous “flash crash,” in which the Dow Jones shed 9% of its market value, but recovered much of the losses by the end of the day.

Feb. 8, 2016: On this date, yields on 10-year Japanese government bonds turned negative. In the months that followed, billions of dollars in sovereign debt would offer negative yields. While this may not be immediately “scary” for the holders of those bonds – yields fall when bond prices rise – negative yields are a market distortion that has sent yield-seeking investors around the globe further out on the risk curve in search of income.

Dec. 18, 1899: Due largely to a drop in silver reserves, the Dow fell 8.72%, in a day the Wall Street Journal called “the most disastrous stock decline in the history of the New York Stock Exchange.”1

June 24, 2016: On this Friday, markets awoke to find that Britain voted to leave the European Union. Most did not anticipate the voting outcome and global indices fell precipitously.

April 14, 2000: This date may be the best to mark the dot.com bubble, as the Nasdaq fell 9%, concluding a week in which it lost 25%. The era remains one of the most speculative in market history.

Oct. 19, 1987: Known as Black Monday, stocks tumbled more than 20%, exacerbated by programmatic trading models that followed a portfolio insurance strategy. Stocks recovered relatively quickly, but the date stands out as one of the most frightening in market history.

Sept. 15, 2008: Many mark the date as the climax of the financial crisis. The morning opened with Lehman Brothers filing for bankruptcy protection and news that Merrill Lynch was sold to Bank of America. The Dow experienced its largest percentage drop in more than six years. Treasury prices soared as investors sought safety and the cost of insuring debt of investment grade companies against default jumped considerably. The only positive: A few months later stocks began an extraordinary bull market run that lasted until early 2020.

October 28, 1929: In another notable October event, the Dow Jones Industrial Average fell 13%, followed by a 12% drop the next day. In the days that followed, many people rushed to banks to withdraw funds, and the bank runs led to bank failures that deepened the crisis. The Great Depression followed, marking an unquestionable low point in U.S. economic history.


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