Black Thursday 1929, What Happened, and What Caused It

The First Day of the Worst Stock Market Crash in U.S. History

Black Thursday news coverage
Top half of the front page of the newspaper Brooklyn Daily Eagle has banner headline reading 'Wall St. In Panic As Stocks Crash' which describes the massive fall in stock value on what became known as Black Thursday, October 24, 1929. Photo: Photo: Icon Communications / Getty Images

Black Thursday is October 24, 1929, the first day of the stock market crash of 1929. That was the worst stock market crash in U.S. history. It kicked off the Great Depression

What Happened

Even before the New York Stock Exchange (NYSE) opened, investors were panicky. The stock market had already fallen 21% since its record close of 381.2 on September 3, 1929. On October 3, 1929, the Washington Post exclaimed, "Stock Prices Crash in Frantic Selling." The next day, the New York Times warned, "Year's Worst Break Hits Stock Market."

On October 23, the day before Black Thursday, the Dow Jones Industrial Average (Dow) had fallen 4.6%.

On Black Thursday, the Dow opened at 305.85. It immediately fell 11% during intra-day trading. That's 1% more than a stock market correction. Even worse, trading volume was 12.9 million shares or three times the normal amount.


The decline on Black Thursday worried Wall Street bankers.

J.P. Morgan and a few other banks bought stocks to restore confidence in the markets. The intervention seemed to work. The Dow recovered a bit, closing 2% down at 299.47.

On Friday, the Dow closed higher at 301.22. Around six million shares were traded.

On Black Monday, it fell to 260.64 with 9.2 million shares traded. That triggered an all-out panic on Black Tuesday. By the end of the day, the Dow had fallen to 230.07, a 12% loss. More than 16 million shares were traded.

After the crash, the Dow continued sliding for three more years. It finally bottomed on July 8, 1932, closing at 41.22. All told, it lost almost 90% of its value since its high on September 3, 1929. In fact, it didn't reach that high again for 25 years until November 23, 1954. Losses from the stock market crash helped create the Great Depression. 


During the Roaring Twenties, investing in the stock market had become a national pastime. From 1922 until right before the crash, the stock market value increased by 219%. That was about 20% per year for seven years.

Those who didn't have the cash to invest could borrow from their stockbroker "on margin." That meant they only had to put 10% to 20% down. By the summer of 1929, around 300 million shares were bought on margin.


The stories of everyone from maids to teachers making millions fueled irrational exuberance.

Some banks even invested their depositors' savings without telling them. Their misuse of funds created the run on the banks that was a hallmark of the Great Depression. Banks didn't have enough to honor depositors' withdrawals. In response, Congress created the Federal Deposit Insurance Corporation (FDIC). It guaranteed their savings as part of the New Deal.

Early Warning Signals

There had been some warning signals in the spring of 1929. In March, the Dow dropped. Bankers reassured investors and restored confidence.

On August 8, the Federal Reserve Bank of New York increased the discount rate from 5% to 6%. On September 26, the Bank of England followed. It needed to slow the loss of its gold reserves to Wall Street investors. Like all other developed countries, England was on the gold standard. That meant it had to honor any payments, if asked, with its value in gold. As interest rates rose, financing for stockbroker margin loans fell.

What Triggered Black Thursday

On September 29, newspapers reported that Clarence Hatry bought United Steel with fraudulent collateral. His company collapsed and investors lost billions. That hammered the British stock market and made U.S. investors even more jittery.


On October 3, England's Chancellor of the Exchequer called America's stock market "a perfect orgy of speculation."

U.S. Secretary of the Treasury Andrew Mellon said investors "acted as if the price of securities would infinitely advance."

The media reported significant stock market declines on October 3, 4, and 16. That contributed to the market's instability. On October 19 and 20, the Washington Post focused on a sell-off of utility stocks.

On Monday, October 21, the market went down again. On October 22, The New York Times blamed stock speculators for the previous day's losses. They named margin sellers, short-selling, and the disappearance of foreign investors. 

On October 23, the market sold off. The Times headline screeched "Prices of Stocks Crash in Heavy Liquidation." The Washington Post said, “Huge Selling Wave Creates Near-Panic as Stocks Collapse.” The alarming media coverage helped set the stage for Black Thursday. 

The Bottom Line

Black Thursday marked the day the Roaring 20s stock market bubble finally burst. This event ended a decade of rapid expansion of the U.S. stock market branded by wild speculation. At this point, stocks of companies were valued way over their actual worth in the face of declining production, low employment, and large debts. That day ushered in the worst economic disaster in U.S. history: the Great Depression.

Black Thursday and the subsequent stock market crash of 1929 led to the complete revamp of regulations on the U.S. securities industry. Congress passed the Securities Act of 1933 and the Securities Exchange Act of 1934 to protect investors. These checks and balances are still in force today.

Black Thursday and the 1929 Stock Market Crash

Day Date Open Close Percentage Change Number of Shares
Black Thursday October 24 305.85 299.47 -2% 12,894,650
Friday October25 299.47 301.22 1%   6,000,000
Saturday October 26 301.22 298.97 -1%  
Black Monday October 28 298.97 260.64 -13% 9,250,000    
Black Tuesday October 29 260.64 230.07 -12% 16,410,000

Frequently Asked Questions (FAQs)

What's the difference between Black Tuesday and Black Thursday?

Black Tuesday refers to the Tuesday immediately following Black Thursday. The stock market crash that began on Black Thursday ended on Black Tuesday. Black Tuesday ended with more losses than Black Thursday, in part because banks did not step in to buy stocks on Black Tuesday as they did on Black Thursday.

Who was president on Black Thursday?

Herbert Hoover was president in 1929 when the stock market crash hit Wall Street. He served one term and left office in 1933.

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The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. Economic History Association. "The 1929 Stock Market Crash."

  2. Encyclopedia Britannica. "Stock Market Crash of 1929."

  3. Virginia Commonwealth University. "Stock Market Crash of October 1929."

  4. Federal Deposit Insurance Corporation. "Historical Timeline."

  5. The White House. "Herbert Hoover."

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