How low did the stock market go in 1929?

The Dow Jones Industrial Average (DJIA) peaked at 381.17 on September 3, 1929, and the crash cycle reached its ultimate low with a close of 41.22 on July 8, 1932 — an approximate 89% peak-to-trough...

2025-11-04 16:00:00

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How low did the stock market go in 1929?

The question "how low did the stock market go in 1929" usually refers to the scale of decline in major U.S. equity averages following the October 1929 crash. In short: the Dow Jones Industrial Average (DJIA) peaked at 381.17 on September 3, 1929, and the crash cycle reached its deepest closing low at 41.22 on July 8, 1932 — roughly an 89% decline from peak to trough. This article explains what those numbers mean, why the deepest low occurred in 1932 rather than in October 1929, and how historians and economists measure and interpret the event.

As of 2024-12-01, according to Federal Reserve historical summaries and the Dow closing-series data, the peak and trough values cited above are the standard reference points used in most modern accounts.

Background: U.S. stock-market conditions in the 1920s

The 1920s in the United States — often called the Roaring Twenties — saw rapid economic expansion, rising corporate earnings in many sectors, and strong stock-market gains. Broader access to credit, falling interest rates in earlier parts of the decade, and innovations in consumer goods and industries contributed to optimism.

Retail investing expanded rapidly. Ordinary households began buying stocks directly and indirectly, and margin buying — purchasing stocks with borrowed funds — became widespread. Margin rules were looser by modern standards, allowing investors to control large positions with relatively small cash down payments.

Investment trusts and holding-company structures also proliferated. These pooled arrangements amplified speculative positions in popular stocks and sectors. The combination of rising prices, easy credit, and speculative sentiment created an unstable foundation: when confidence faltered, leveraged positions had to be liquidated, pushing prices lower.

The 1929 crash — October events and immediate falls

When people ask "how low did the stock market go in 1929?" they often mean the dramatic October days when prices collapsed. The key dates are:

Black Thursday (October 24, 1929): Heavy selling began, with large volume and sharp price falls in morning trading. A banking-industry-led effort to stabilize prices produced a temporary late-day rally, but the tone had changed.
Black Monday (October 28, 1929): Prices collapsed again; the Dow fell more than 12% in a single trading day (commonly cited as a drop of about 12.8% on that day).
Black Tuesday (October 29, 1929): Panic resumed and the Dow fell again — commonly cited as about an 11.7% drop on that day.

Those October sessions were among the most violent single-day declines in U.S. stock-market history. Trading volumes surged as brokers called margin loans and as sellers outnumbered buyers. The immediate October declines wiped out large amounts of speculative paper wealth and signaled a shift from the boom of the 1920s to an extended downward trend.

However, the absolute lowest closing level for the major index did not occur during October 1929. The largest cumulative declines unfolded over the subsequent years.

Peak and ultimate low — measurement and key figures

When answering "how low did the stock market go in 1929," it is important to specify measurement choices. The canonical figures for the Dow Jones Industrial Average are:

Peak: 381.17 (closing value on September 3, 1929).
October 1929 immediate low (late October decline): by the end of October 1929, the Dow had lost a substantial share of its September peak — the index closed October 31, 1929 significantly below the September high, but not at the ultimate trough.
Trough: 41.22 (closing value on July 8, 1932).

From 381.17 to 41.22 represents a decline of approximately 89.2% in nominal closing values (peak-to-trough). The time span from peak (September 3, 1929) to trough (July 8, 1932) is roughly 34 months.

Put simply: if a person asked "how low did the stock market go in 1929?" with an intent to capture the full crash cycle, the best short answer is that the October 1929 events began the collapse, but the market ultimately fell about 89% by mid‑1932.

Key numbers repeated for clarity

DJIA peak (close): 381.17 on September 3, 1929.
DJIA trough (close): 41.22 on July 8, 1932.
Peak-to-trough decline: ~89% (approximately 89.2%).
Time from peak to trough: ~34 months.

As of 2024-12-01, these figures are reflected in historical DJIA closing series maintained by major historical-data compilers and are cited in academic and reference works.

Why the October lows differ from the final trough

The October 1929 sessions produced massive daily declines but did not mark the final bottom because the economic contraction and successive waves of financial stress continued into the early 1930s. Bank failures, declining industrial output, falling international trade, and deflation extended the bear market until 1932.

Other indices and measures

When considering "how low did the stock market go in 1929," remember the DJIA is one index with a specific basket of industrial stocks; it is not a complete market-cap-weighted index like the modern S&P 500. Other ways to measure market performance include:

S&P-style composites and proxies: The S&P 500 was not published in its modern form until later, but historical reconstructions and broad-market proxies show similar or larger proportional declines across the wider market. Many small-cap and speculative issues fell even further than the DJIA.
Small-cap and speculative stocks: Stocks outside the blue-chip DJIA group, including many margin-financed speculative issues and securities in investment trusts, experienced extreme collapses and bankruptcies, often exceeding the DJIA percentage losses.
Price vs. total return: Including dividends reduces the measured decline somewhat but does not change the overall magnitude of the crash. Adjusting for inflation (real terms) shows an even larger loss in purchasing power during parts of the downturn due to deflation.

Different indices, weights, and inclusion rules produce differing percentage declines. Still, no commonly used historical measure avoids the conclusion that the U.S. equity market lost the majority of its value from the 1929 peak to the 1932 trough.

The multi-year decline (1929–1932) vs. the October 1929 crash

A central distinction for readers is between the dramatic single-day or week declines of October 1929 and the full multi-year bear market that followed. October 1929 stands out for its speed and panic; the broader decline to 1932 reflects a prolonged economic contraction. Key points:

October 1929 was the trigger: the panic and price falls of late October set off margin calls, losses of confidence, and accelerating deleveraging.
1929–1932 was the process: over the next months and years, corporate earnings fell, banks failed, industrial production declined, and credit contracted. These forces drove further declines in equity values.
The final low in 1932 reflected the cumulative economic damage rather than a single panic day.

Thus, answering "how low did the stock market go in 1929" requires clarifying whether the questioner means the immediate October crash or the ultimate low of the overall collapse — and the standard historically cited figure for the full collapse is the ~89% DJIA decline to July 1932.

Causes and contributing factors

Economists and historians identify a mix of proximate and structural causes that together produced the crash and extended decline. The major factors commonly cited include:

Speculative leverage and margin buying: widespread use of margin magnified price movements. Forced liquidations intensified declines.
Investment trusts and holding companies: leveraged structures concentrated risk and amplified selling when liquidity dried up.
Monetary policy: debates continue about the Federal Reserve's stance in 1929–1932, but many scholars highlight monetary contraction and a failure to provide sufficient liquidity as exacerbating the downturn.
Banking failures and credit contraction: bank runs and bank closures reduced lending and damaged confidence.
Overproduction and structural imbalances: sectors that had grown rapidly in the 1920s faced falling demand as consumer credit tightened.
International factors: post‑World War I debt structures, reparations, and trade contractions contributed to global economic stress that fed back into U.S. markets.

Different schools of thought weigh these factors differently. Some emphasize financial-market mechanics (margin, leverage), others focus on macroeconomic policy (monetary and fiscal policy missteps), and many point to the interaction between finance and the real economy.

Economic and social consequences

The decline from the 1929 peak to the 1932 trough occurred alongside the Great Depression, which had profound economic and social consequences:

Real economy: GDP contracted sharply in the early 1930s. Industrial production fell dramatically as demand collapsed.
Unemployment: Joblessness rose to extremely high levels, with unemployment rates in the U.S. reaching historically high peaks in the early 1930s.
Bank failures: Thousands of banks failed, eroding household savings and reducing credit availability.
International trade: World trade collapsed, further depressing industrial output.
Policy responses: In later years, policy changes including banking reforms (for example, changes later associated with the Banking Act and deposit-insurance concepts) and fiscal and monetary policy adjustments were implemented in response to the crisis.

These consequences show why many observers view the stock-market collapse and the broader economic contraction as deeply linked phenomena, even as debates continue about direction and causality.

Recovery timeline and long-term market impact

For investors and historians, the long duration of the recovery is notable. The DJIA did not regain its September 3, 1929 peak closing level until November 23, 1954 — more than 25 years later. Key considerations:

Nominal vs. real recovery: In nominal terms, the index level returned to the 1929 high only in the mid‑1950s. Adjusted for dividends and inflation, the path is different, but real purchasing power and income effects took many years to recover.
Dividend returns: Dividends paid by companies over the decades affect total-return calculations; including dividends shortens the effective recovery gap compared with price-only measures, but the scale of the 1929–1932 decline still represents a profound loss for holders of equities at the time.
Structural changes: The crisis led to regulatory and institutional changes in banking and securities markets that altered the financial landscape going forward.

Understanding how long the recovery took helps explain the long shadow the crash cast over policy, investment behavior, and public attitudes toward markets.

Data, methodology, and caveats

Accurately answering "how low did the stock market go in 1929" requires careful attention to data and definitions. Important caveats include:

Index composition: The DJIA is a price-weighted index of a fixed set of industrial companies; its composition has changed over decades. Comparisons across eras require acknowledging those changes.
Closing prices vs. intraday lows: The most commonly cited figures use closing prices (e.g., DJIA close of 41.22 on July 8, 1932). Intraday swings may show lower or higher extremes on particular days.
Nominal vs. inflation-adjusted: Nominal declines do not account for changes in purchasing power; during deflationary periods, nominal declines may understate or overstate real losses depending on the reference.
Total return vs. price return: Including dividends (total return) presents a fuller picture of investor returns than price-only indices.
Data sources and reconstruction: Some broad-market measures for the 1920s and 1930s are reconstructions using historical price series; methodologies vary slightly across data providers.

Because of these issues, authoritative accounts typically specify exactly which series and definitions are used when quoting percentage declines.

Historical interpretations and scholarly debate

Scholars continue to debate the relative importance of different causes and the role the crash itself played in generating the Great Depression. Major interpretive strands include:

Financial-amplification theories: These emphasize leverage, margin calls, and banking fragility as key amplifiers linking a stock-market collapse to the real economy.
Policy-failure views: These highlight monetary contraction, insufficient macroeconomic stabilization, and policy mistakes that deepened and prolonged the downturn.
Structural views: These focus on underlying imbalances, including international debt and trade structures, sectoral overinvestment, and productivity shocks.

Notable works that shaped the debate include contemporary accounts and later syntheses (for example, influential books and economic histories) that analyze both market mechanics and macroeconomic policy. While consensus exists on the gravity of the crash and the Depression, debate continues on precise causal weights and policy counterfactuals.

Timeline of key dates (1928–1932)

September 3, 1929: DJIA closes at its pre-crash peak of 381.17.
October 24, 1929 (Black Thursday): Heavy selling and panic; a late-day stabilization attempt takes place.
October 28, 1929 (Black Monday): Large single-day decline (commonly cited ~12.8%).
October 29, 1929 (Black Tuesday): Continued panic and another large daily drop (commonly cited ~11.7%).
1930–1931: Progressive declines, bank failures, and worsening economic conditions; repeated downward legs in equity prices.
July 8, 1932: DJIA closes at its trough of 41.22, the commonly cited bottom of the crash cycle.
November 23, 1954: DJIA closes above its 1929 peak for the first time since the crash, marking a long nominal recovery period.

References and further reading

The following sources are commonly referenced in historical and academic accounts of the crash and its aftermath (listed without links):

Dow Jones historical closing series and historical data compilations.
Federal Reserve historical summaries and educational materials on the Great Depression.
Encyclopaedia Britannica entries on the Wall Street Crash of 1929 and the Great Depression.
John Kenneth Galbraith, The Great Crash 1929 (classic popular account).
Scholarly articles and working papers in economic history journals and NBER publications.
EH.Net and other economic-history discussion platforms.
Major reference sites and historical-data compilers that maintain DJIA series and reconstruct broader-market measures.

As of 2024-12-01, according to Federal Reserve historical notes and the Dow closing series, the peak and trough figures cited in this article are the standard reference points used by researchers.

Notes for editors

The phrase "how low did the stock market go in 1929" often refers to either the dramatic October 1929 crash days or to the full peak‑to‑trough decline that culminated in July 1932. Clarify which interpretation readers likely seek.
Use closing-index figures when reporting peak and trough values, and note whether numbers are nominal, inflation-adjusted, or total-return.
Cite primary series (Dow closing historical series, Federal Reserve historical data) when quoting exact values and dates.

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As of 2024-12-01, according to the Encyclopaedia Britannica and major historical compendia, the chronological details and index figures summarized above represent widely accepted historical benchmarks.

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