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Stock Market Crash

Definition

The Stock Market Crash refers to the drastic drop in stock prices on the New York Stock Exchange in October 1929. This event marked the beginning of the Great Depression.

Analogy

Imagine you're playing a game of Jenga. You've built this tall, impressive tower (the booming economy), but then someone pulls out a crucial block (investors start selling off stocks) and suddenly, everything comes crashing down (the stock market crash).

Related terms

Bull Market: A period of time in financial markets when the price of an asset or security rises continuously. The term is most often used to refer to the stock market but can be applied to anything that is traded, such as bonds, currencies, and commodities.

Great Depression: A severe worldwide economic depression that took place during the 1930s. It began after the stock market crash of October 1929, which sent Wall Street into panic and wiped out millions of investors.

Black Tuesday: Refers specifically to October 29, 1929; it was one of the worst days in stock market history when share prices on Wall Street collapsed completely.