Learn the stock market › Stock market crashes in history › Lesson 1 of 7
The stock market crash of 1929
Before the crash
The Federal Reserve's historians describe the 1920s as one long climb: the Dow went from 63 in August 1921 to 381 in September 1929, six times higher. In the twelve months before the high the S&P 500 rose 49%.
Much of it was bought on credit. A buyer typically put down about 10 percent and borrowed the rest, with the stock as collateral. After the high, the economist Irving Fisher said stocks had reached "what looks like a permanently high plateau."
The days in October
The first three rows are the largest falls between the high and the low, and the last three are the largest rises.
| Date | In one day |
|---|---|
| Oct 28, 1929 | −12.9% |
| Oct 29, 1929 | −10.2% |
| Nov 6, 1929 | −9.9% |
| Oct 30, 1929 | +12.5% |
| Oct 6, 1931 | +12.4% |
| Jun 22, 1931 | +10.5% |
The first two are Black Monday and Black Tuesday, October 28 and 29. The Federal Reserve gives nearly 13 and nearly 12 percent for the Dow on those days, so two indexes can show different numbers for the same day. The largest rise came on Oct 30, 1929, in the middle of the crash.
The low came nearly three years later
S&P 500, 1928–1954
S&P 500The high before the crash
Between Nov 13, 1929 and Apr 10, 1930 the index rose 46.8% inside the crash. Then it fell on to the low.
| What | Date | S&P 500 |
|---|---|---|
| The high | Sep 16, 1929 | 31.86 points |
| First close 20% below | Oct 28, 1929 | −20% |
| The low | Jun 1, 1932 | −86.2% |
| Back at the high | Sep 22, 1954 | 25 years |
Counted from the first close 20% below the high, the index stood −21.5% a year later and −68.8% three years later. A fall from a high is called a drawdown, and one of at least 20% a bear market. No other has gone this deep: all twelve crashes since 1928 are in the study of every crash.
Did the crash cause the Depression?
Not in the simple way it is usually told. Ben Bernanke, then a Federal Reserve governor, said in 2002 that research largely turns that around: the economy was already slowing in the fall of 1929, and the business cycle peak came in August, before the crash. He pointed to the Fed's own rate rises.
How we counted
The S&P 500 began in 1957, and the numbers before that come from its 90-company predecessor. The index leaves out dividends. They were part of the return, so with them the way back was shorter than the 25 years in the table. Closes through Nov 6, 2026.
Test yourself
How long did the S&P 500 take to get back to its 1929 high, without dividends?
Sources
- Federal Reserve History, Stock Market Crash of 1929, read November 5, 2026.
- Ben Bernanke, Asset-price "bubbles" and monetary policy, speech of October 15, 2002, read November 5, 2026.