(NewsNation) — President Donald Trump’s so-called “Liberation Day” tariffs have not been favorable to the stock market.
The major market indices — the Dow, Nasdaq and S&P 500 — have plunged, and fears of a recession are rising.
Following Trump’s announcement of tariffs on nearly 90 countries, a two-day sell-off ensued, and the Dow saw its worst two-day loss since the COVID-19 pandemic.
The 2020 pandemic ranks among the biggest stock market crashes in United States history. One of the most infamous, however, is “Black Monday,” the largest single-day percentage decline in history.
Nearly 40 years later, could another Black Monday be on the horizon?
What is ‘Black Monday’?
Quite different from Black Friday, when shoppers take advantage of post-Thanksgiving deals, Black Monday marks the day Wall Street crashed with the largest one-day stock market decline in history.
On Oct. 19, 1987, the Dow dropped 22.6% in one day, causing a market chain reaction. The S&P 500 also dropped by 20.5%, according to Bankrate.
Significant crashes also occurred:
- On Oct. 29, 1929, known as Black Tuesday
- During the dot-com bubble crash between 2000 and 2002
- During the recession from 2008 to 2009
- During the COVID-19 pandemic in March 2020
How long did the ‘Black Monday’ stock crash last?
According to Bankrate, Black Monday was an isolated event and did not have many impacts. Despite the crash in October — and the fact that the Dow had fallen 22.6% — the market closed out 1987 with a slight gain overall.
It took just under two years for the market to regain everything it had lost from the Black Monday crash.
Could another ‘Black Monday’ come in 2025?
Jim Cramer, a financial analyst and host of CNBC’s “Mad Money,” has warned of a second Black Monday if Trump does not reverse course on his global tariffs. Cramer has been predicting the scenario on social media for days.
“If President Trump does nothing and if Europe retaliates then we the odds jump for an October 87 replay,” Cramer, an investor himself, wrote Friday.
“Look i don’t want a repeat of ’87 of course,” he said in another post. “But i traded during that period and remember each day well.. We knew to sell.. and we are proud we did. But we felt like idiots because the week BEFORE the crash was so bad and we were late to sell.”
On Sunday, Trump said, “I don’t want anything to go down, but sometimes you have to take medicine to fix something.”
Thomas Mathews, head of markets, Asia Pacific for Capital Economics, said, “We still think he [Trump] will lower the dosage by paring back his tariffs. But, if he doesn’t, equities could get a lot sicker yet.”
At the close of the trading day Friday, the Dow was down 2,231.07 points. The S&P 500 was down 154.63 points, and the Nasdaq was down 962.82 points. On Monday, the S&P 500 dropped nearly 200 points at open. The Dow lost over 1,350 points, and the Nasdaq lost nearly 700 points.
