The largest-ever one-day percentage decline in the Dow Jones Industrial Average comes not in 1929 but on October 19, 1987. As a number of unrelated events conspired to tank global markets, the Dow dropped 508 points—22.6 percent—in a panic that foreshadowed larger systemic issues.
Confidence on Wall Street had grown throughout the 1980s as the economy pulled out of a slump and President Ronald Reagan implemented business-friendly policies. In October 1987, however, indicators began to suggest that the bull market of the last five years was coming to an end. The government reported a surprisingly large trade deficit, precipitating a decline in the U.S. Dollar. Congress revealed it was considering closing tax loopholes for corporate mergers, worrying investors who were used to loose regulation.