The recovery from the 1987 stock market crash, commonly known as Black Monday, was remarkably swift, with immediate gains made within days and a full return to pre-crash highs achieved in less than two years.
Immediate Market Rebound
Following the dramatic decline on October 19, 1987, the stock market demonstrated significant resilience, regaining a substantial portion of its losses very quickly.
- Rapid Recovery: In just two trading sessions immediately after Black Monday, the Dow Jones Industrial Average (DJIA) recovered 288 points. This impressive gain represented 57 percent of the total downturn experienced on Black Monday, signaling a quick stabilization and partial recuperation of market value.
Full Recovery and Beyond
While the initial rebound was crucial, the complete recovery is typically measured by when market indices not only regain lost ground but also surpass their previous peak levels.
- Surpassing Pre-Crash Highs: US stock markets, including major indices like the DJIA, reached and exceeded their pre-crash high values in less than two years following the crash. This quick return to and surpassing of previous peaks highlights the underlying strength and adaptive capacity of the market during that period.
The timeline below summarizes the key phases of recovery:
| Recovery Milestone | Timeframe | Details |
|---|---|---|
| Significant Portion of Losses Gained | Within 2 trading sessions | DJIA recovered 57% of its Black Monday downturn |
| Surpassing Pre-Crash Highs | Less than 2 years | US stock markets fully exceeded their levels from before the 1987 crash |
