US stock market tumbles today; is October really Wall Street’s ‘crash month’? Here’s the timeline
Trump’s move came in response to China’s recent export controls on rare earth minerals critical to its technology and defense industries, new port fees on American ships and an antitrust investigation into Qualcomm. While people are still in shock as nearly $1.65 trillion was wiped out of the US stock market today, The Market Matrix shows that some people on social media are claiming that October has been a scary month throughout history.
Is October really a “scary” month for US stock markets?
This relationship stems from infamous market crashes such as the Wall Street Crash of 1929, including Black Thursday (October 24), Black Tuesday (October 29), and Black Monday of October 19, 1987. Many investors equate these events with general market trends, fueling the belief that October is particularly bearish.
X users also summarized the downward trends in October; A user named Chris Reilly wrote: “Did you know that the worst US stock market crash of all time happened in October? There was the Bank Panic of 1907…
Wall Street Crash of 1929…
And Black Monday in 1987, when the Dow fell 22.6% in one day.”
“That’s why October is feared as the month of crash on Wall Street,” Suer added.
Historical downward movements in October
Given the extreme market volatility, October witnessed several major declines in the Dow Jones Industrial Average (DJIA), as compiled by Barchart:
- October 19, 1987: −22.6 percent (record for largest one-day change in percentage terms)
- 28 October 1929: −13 percent
- 29 October 1929: −12 percent
- 6 November 1929: −10 percent
- 28 October 2008: −11 percent
- October 13, 2008: −11 percent
These events contributed to October becoming known as a month in which investors should be prepared for turbulence.
October isn’t that bad: There are big gains too
However, October also saw significant upward movements in stock history. Eight of the 15 days the DJIA has moved 10 percent or more in history occurred in October, and five of them were gains:
- October 6, 1931: +15 percent
- October 30, 1929: +12 percent
- October 13, 2008: +11 percent
- October 28, 2008: +11 percent
- October 21, 1987: +10 percent
These gains show that October was not only bearish, but also highly volatile, with opportunities as well as risks.
Conclusion: October is a volatile month for US stocks
When judging October by volatility rather than direction, the conclusion is clear: It is a “scary” month in terms of both upside and downside volatility, and the outlet described it as “volatile.”
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