Throughout the last century, the stock market has been a consistent part of American life. When prices began to fall in the United States, Americans reacted in diverse ways. From public outcry to government intervention, the effects of the stock slide were far-reaching and long-lasting.

The Wall Street Crash of 1929

The stock market crash of 1929 is widely regarded as one of the most significant stock market crashes in US history. Many people attribute the crash to industrial overproduction, margin speculation, and the tightening of credit. As the economy declined, the Dow Jones Industrial Average plummeted from a high of 381.17 in September 1929 to a low of 41.22 in July 1932. As a result, the US Great Depression began.

The effects of the stock market crash were felt across the country. Millions of Americans lost savings and their jobs. Banks closed, businesses went bankrupt, and unemployment skyrocketed. In an effort to restore confidence in the market, President Franklin D. Roosevelt issued a number of New Deal programs, such as the Securities and Exchange Commission, the Federal Bank Act, and the Social Security Act, in an effort to stabilize the economy.

The Dot-Com Bubble of 2000

The dot-com bubble of 2000 followed the stock market crash of 1929. The dot-com bubble was driven largely by the rise of internet companies, many of which had no profits. This caused investors to pump large amounts of money into internet-based stocks, driving stock prices up. As the stock price inflation continued, investors began to worry about a potential crash. In March 2000, the NASDAQ composite index peaked at 5,048.62.

When the bubble finally burst in April 2000, stock prices tumbled. The NASDAQ index dropped to 1,139.90, resulting in billions of dollars of losses for investors. Many high-profile internet companies, such as AOL, Yahoo, and Pets.com, went bankrupt as a result. The US Securities and Exchange Commission stepped in to restore investor confidence, introducing rules to protect investors from fraudulent investment schemes.

The 2020 Market Crash

In 2020, the stock market experienced a historic crash due to the COVID-19 pandemic. The Dow Jones Industrial Average fell from a high of 29,568.57 in February to a low of 18,213.65 in March. This was the largest single-day point drop in history. The subsequent decline left investors reeling and caused significant losses.

The impact of the 2020 crash has been much more far-reaching than others before it. As a result of the economic recession, many Americans have had to make difficult decisions like cutting back on spending, finding new jobs, or filing for bankruptcy. The US government has introduced multiple financial stimulus packages to ease the burden for struggling Americans.

Conclusion

When stock prices began to fall in the United States, Americans reacted with a variety of responses. From the Wall Street Crash of 1929 to the 2020 crash, the effects of a stock market downfall can be devastating to individuals, businesses, and the economy. From public outcry to government intervention, Americans have had to come up with creative solutions to combat the sadness and losses associated with stock market crashes.