The Dow Jones Industrial Average (DJIA) closed at a major high in early September 1929, after years of rapid gains and heavy speculation. Many investors were buying stocks with borrowed money, which made the market more fragile if prices fell. This peak became the reference point for the steep losses that followed in late 1929.
Heavy selling hit the New York Stock Exchange on October 24, 1929, later called “Black Thursday.” Trading volume surged to a record for the time as prices fell sharply in the morning. A group of major bankers bought large, well-known stocks to steady prices, limiting the day’s decline but not restoring confidence.
On October 28, 1929 (“Black Monday”), the DJIA suffered one of its largest single-day percentage drops. As prices fell, many investors faced margin calls (demands to add cash or sell), which forced more selling. The drop signaled that efforts to calm the market on October 24 had not solved the underlying panic.
On October 29, 1929 (“Black Tuesday”), an extraordinary wave of selling pushed trading volume to more than 16 million shares, a record at the time. Stock prices plunged again, and many shares had few buyers even at sharply lower prices. This day became the most famous symbol of the crash and its immediate market shock.
The day after Black Tuesday, the DJIA rebounded sharply as some investors bought stocks they saw as cheap. This kind of move is common after sudden crashes, when prices have overshot downward in a panic. However, the rebound did not restore the earlier upward trend, and uncertainty remained high.
By mid-November 1929, the DJIA reached an interim low around 198, far below its early-September peak. The fast decline reduced household and business wealth and weakened confidence. This “bottom” was temporary, but it marked the end of the first, most dramatic phase of the crash.
After the November low, stocks rose for several months in what is often called a bear-market rally (a temporary rebound during an overall downturn). The DJIA climbed to a secondary peak in mid-April 1930. The rally encouraged hopes that the worst was over, even as deeper economic problems were building.
In June 1930, President Herbert Hoover signed the Smoot-Hawley Tariff Act, raising U.S. tariffs on many imports. More than 1,000 economists had urged a veto, warning that higher tariffs could worsen the slump by inviting retaliation. The law became a major policy turning point linked to shrinking world trade and rising international economic stress.
By mid-1930, the earlier stock rebound was no longer convincing evidence of recovery. Falling demand, job losses, and declining profits kept pressure on businesses and banks. The market’s continued weakness set the stage for financial stress to shift from Wall Street into the banking system.
In November 1930, a regional banking crisis helped turn a severe downturn into a broader financial emergency. Failures tied to Caldwell and Company and its affiliated banks triggered withdrawals and “contagion,” where fear spreads from one bank to others. Hundreds of banks suspended operations within weeks, tightening credit for households and businesses.
On December 11, 1930, New York’s banking superintendent closed the Bank of United States after efforts to arrange a merger failed and depositors rushed to withdraw funds. It was one of the most prominent bank closures of the period and received nationwide attention. The shutdown amplified public fear about bank safety at a time when there was no federal deposit insurance.
By the end of December 1930, the story of the crash had moved beyond stock prices to a wider financial breakdown driven by bank failures and withdrawals. The market crash of October 1929 remained important, but the banking panics of late 1930 made the downturn harder to stop by shrinking lending and damaging confidence. This transition marked the close of the “immediate market fallout” period and the start of a deeper Depression-era financial crisis.
Wall Street Crash of 1929 and Immediate Market Fallout (Oct 1929–Dec 1930)