How much did stocks drop in the Great Depression

How much did stocks drop in the Great Depression

As of 15 January 2026, according to Investopedia, the Library of Congress, HISTORY.com, the Hoover archives, MacroTrends, Federal Reserve History, and Encyclopaedia Britannica, the U.S. stock market experienced one of the deepest and longest declines in modern financial history. In this article we answer the core search intent—how much did stocks drop in the Great Depression—by presenting peak‑to‑trough figures, short‑term crash magnitudes, timeline of key dates, causes, economic consequences, measurement caveats, and the major policy and regulatory changes that followed.

This article is designed to be accessible to beginners while grounded in authoritative historical data. Read on to get precise numbers, understand how those numbers are measured, and see why the 1929–1932 decline remains a central reference point for policymakers and investors.

Summary of the decline

The commonly cited peak‑to‑trough figure for the Dow Jones Industrial Average (DJIA) during the Great Depression is a fall from a peak of 381.17 on September 3, 1929 to a trough of 41.22 on July 8, 1932 — a nominal decline of roughly 89 percent. Shorter‑term crash events in late October 1929 produced very large daily and weekly losses, and other series (broader NYSE measures, inflation‑adjusted indices, or total return series including dividends) will produce different percentage declines. The question how much did stocks drop in the Great Depression thus has a straightforward headline answer for the DJIA (~89% nominal) and a more nuanced interpretation once alternate measures and timeframes are considered.

Key figures and statistics

Dow Jones Industrial Average peak and trough

• Peak (DJIA): 381.17 on September 3, 1929.
• Trough (DJIA): 41.22 on July 8, 1932.
• Nominal peak‑to‑trough decline: approximately 89.2 percent.

These figures are the most commonly cited single numbers when answering how much did stocks drop in the Great Depression. They describe the DJIA's nominal movement and are based on historical index reconstructions used by scholars and financial historians.

Short‑term crash magnitudes (October 1929)

• October 24, 1929 (Black Thursday): panic selling and heavy volume marked the market’s dramatic reversal.
• October 28, 1929 (Black Monday): the DJIA fell by roughly 13 percent in a single day.
• October 29, 1929 (Black Tuesday): the DJIA fell by roughly 12 percent in a single day.

Across late October 1929, the market experienced multiple double‑digit daily swings and cumulative losses that exceeded 20–25 percent across some weeks. These short‑term collapses were the ignition point for a broader multi‑year decline.

Early rapid declines (ten‑week and mid‑November figures)

Contemporary accounts and later historical summaries note that in the roughly ten weeks following the October 1929 crash onset, stocks lost about half their value from the September 1929 peak. By mid‑November 1929, the DJIA had fallen roughly 45–50 percent from its early September high, illustrating the speed of the initial decline even before the deeper trough that followed in 1932.

Recovery timeline

• The DJIA did not regain its 1929 nominal peak until November 23, 1954.
• In real (inflation‑adjusted) and total return terms, the recovery timeline is even longer, owing to lost purchasing power and the effect of dividends.

The bear market that began in 1929 persisted for many years, making the 1929–1932 episode not only deep but also long‑lasting.

Timeline of major dates

• September 3, 1929: DJIA peak at 381.17.
• October 24, 1929 (Black Thursday): heavy selling and market turmoil begins.
• October 28–29, 1929 (Black Monday & Black Tuesday): steep multi‑day declines with cumulative, dramatic losses.
• November 1929: continued declines; by mid‑November the market had lost nearly half its September value.
• July 8, 1932: marked low for the DJIA at 41.22.
• 1930–1933: period of widespread bank failures, credit contraction, and rising unemployment.
• November 23, 1954: DJIA surpasses its 1929 peak in nominal terms.

This sequence shows how a concentrated crash episode in late 1929 fed into a prolonged contraction in asset prices and the broader economy.

Causes and contributing factors

Understanding how much did stocks drop in the Great Depression requires explaining why the drop occurred. Historians and economists emphasize multiple, interacting causes rather than a single trigger.

• Speculative overvaluation and margin buying: During the 1920s, rising stock prices, easy credit, and the widespread use of margin (borrowed funds to buy securities) left prices vulnerable to forced liquidations.

• Monetary policy and Federal Reserve actions: Contractionary measures and a banking system under stress contributed to tightened credit conditions, amplifying asset price declines.

• Banking panics and credit contraction: Bank runs and failures reduced available lending, cutting off financing for businesses and consumers and turning market declines into a self‑reinforcing economic slump.

• Global trade collapse: Protectionist policy moves such as the Smoot–Hawley tariff exacerbated international downturns, reducing export demand and impairing corporate earnings.

• Underlying structural weaknesses: Overproduction in agriculture and industry, uneven income distribution, and high household leverage made the economy fragile even before the crash.

These factors together explain both the abrupt magnitude of the stock declines and the difficulty of recovery.

Economic and social consequences

The drop in stock prices was not simply a financial statistic; it fed into broad economic disruption and social hardship:

• Wealth destruction: The near‑90 percent nominal collapse of the DJIA represented immense losses to investors and eroded household and institutional wealth.

• Bank failures and credit losses: Declining asset values undermined bank balance sheets, contributing to a wave of failures and further tightening credit.

• Collapsed investment and consumption: With firms unable to finance operations and households suffering wealth losses and unemployment, aggregate demand fell sharply.

• Unemployment surge: U.S. unemployment rose to historically high levels, peaking around 25–30 percent in many measures—producing widespread hardship.

• Long social effects: Reduced lifetime earnings, increased poverty, and political pressure for reform reshaped U.S. policy and institutions for decades.

The linkages between stock declines, banking stress, and collapsing demand made the financial crash an amplifier of an already weak economy.

How the decline is measured and interpreted

When readers ask how much did stocks drop in the Great Depression, different answers can be correct depending on measurement choices. Important distinctions include:

• Index choice: The DJIA is the commonly cited series, but broader measures of the New York Stock Exchange or reconstructed total‑market series can show different magnitudes.

• Nominal vs. real: Nominal declines do not adjust for inflation or deflation. Adjusting for price level changes (deflation during the early 1930s) affects long‑run comparisons.

• Price return vs. total return: Indices that include dividends (total return) show smaller effective wealth losses than price indices alone.

• Peak‑to‑trough vs. intermediate short‑term drops: The peak‑to‑trough DJIA figure (~89%) captures the full bear market. Shorter windows—daily, weekly, or month‑long—show dramatic but distinct statistics (e.g., Oct 28–29, 1929 losses of 13% and 12% respectively).

• Data construction and historical reconstructions: Index weighting, the set of component firms, and historical revisions can slightly alter precise numeric claims.

Because of these measurement nuances, reputable sources sometimes quote different percentages. The most straightforward and widely cited response to how much did stocks drop in the Great Depression is the DJIA nominal peak‑to‑trough figure (~89%), with caveats noted above.

Policy responses and regulatory changes

The scale of the market collapse and its economic fallout prompted far‑reaching policy responses aimed at stabilizing the financial system and preventing future crises:

• Banking reforms and deposit insurance: The U.S. established federal deposit insurance to reduce bank runs and restore public confidence.

• Securities regulation: New federal oversight of securities markets aimed to improve disclosure, reduce fraud, and limit dangerous practices that had amplified the 1920s boom.

• Glass–Steagall banking separation: Measures separating commercial and investment banking were designed to reduce conflicts of interest and risk taking.

• New Deal fiscal and regulatory programs: Broad programs increased government spending, relief, and reforms intended to revive demand and restructure the financial system.

• Monetary policy lessons: Policymakers and central bankers studied the 1929–1933 episode to better understand the role of liquidity, lender‑of‑last‑resort functions, and the risks of policy inaction.

These policy responses reshaped U.S. financial architecture and informed later crisis management frameworks.

Historical context and comparison with other bear markets

The 1929–1932 decline is commonly compared with later severe market downturns:

• 2007–2009 Global Financial Crisis: The S&P 500 fell roughly 57 percent from peak to trough—severe but shallower and shorter than the 1929–1932 DJIA decline in nominal terms.

• 2020 COVID‑19 crash: The S&P 500 fell roughly 34 percent from February to March 2020 but rebounded quickly with policy support.

• 1929–1932: The roughly 89 percent nominal decline in the DJIA and the prolonged recovery make this episode unique among modern bear markets for depth and duration.

Why the Great Depression remains the most severe modern example rests on both the scale of asset price declines and the way those declines interacted with banking failures, deflation, and policy missteps—producing a prolonged economic catastrophe.

Notes on data sources and reliability

Historical daily and monthly index values come from contemporary exchange records and later reconstructions by historians and data providers. Primary sources include the Federal Reserve’s historical analyses, archival newspaper accounts, and modern historical summaries.

Caveats:

• Index composition: The DJIA’s component firms changed over time; the index is price‑weighted rather than market‑cap weighted, which affects interpretation.

• Revisions and reconstructions: Some series are reconstructed from partial records; small differences between datasets can occur.

• Measurement choice: As noted above, using broader market measures, inflation adjustments, or total return calculations yields different percentage results.

For readers seeking to verify numbers, consult established historical sources and datasets maintained by central banks, academic projects, and long‑term market databases.

Why these numbers matter today

Understanding how much did stocks drop in the Great Depression is not only an academic exercise. The episode informs:

• Risk management: The depth and duration of the 1929–1932 decline remind investors and policymakers that extreme tail events can be durable and systemic.

• Financial regulation: Many modern regulatory frameworks were shaped by lessons from this era, emphasizing transparency, capital buffers, and deposit insurance.

• Policy design: Monetary and fiscal responses to downturns draw on historical experience to avoid the missteps that deepened the Depression.

Studying the numbers and their context helps contemporary decision‑makers design better prevention and mitigation tools for future crises.

Frequently asked follow‑ups about the drop

• Q: Does the ~89% figure include dividends?
  A: No. The commonly quoted DJIA peak‑to‑trough decline is a price index measure and does not include dividends. Total return measures that add dividends would show a smaller effective loss, though still severe.

• Q: Are there broader market series that show different drops?
  A: Yes. Broader measures of the NYSE or reconstructed aggregate market indices can differ in magnitude from the DJIA. Some reconstructions suggest similar deep losses across the broader market, but exact percentages vary by dataset.

• Q: How fast did the loss happen?
  A: The initial crash and subsequent ten‑week period after October 1929 produced very rapid declines (roughly half the peak value in weeks to months). The full decline to the 1932 trough then unfolded over nearly three years.

Practical reading guide and primary sources

This article draws on established historical summaries and archival material. For primary perspectives and detailed reconstructions, respected sources include major financial history summaries, central bank historical essays, and archival collections of contemporary reporting.

As of 15 January 2026, the following institutions and historical summaries provide authoritative accounts used in compiling the figures and chronology above: Investopedia; Library of Congress historical collections; HISTORY.com summaries; Hoover Institution archival essays; MacroTrends historical index charts; Federal Reserve History essays; and Encyclopaedia Britannica entries.

Further exploration (and Bitget resources)

If you want to explore market history, risk, and financial tools further, consider educational resources that provide historical datasets, timelines, and regulatory histories. For readers interested in modern digital finance tools and secure custody, Bitget offers educational material and secure wallet services; explore Bitget’s learning center and Bitget Wallet for custody and security information.

To deepen your understanding of how historical declines inform modern risk frameworks, review differing index series (price vs. total return), long‑term charts that adjust for inflation, and scholarly histories of the banking crises of 1930–1933.

Ending note: what the headline number means

When asked how much did stocks drop in the Great Depression, the clear headline is this: the Dow Jones Industrial Average fell roughly 89 percent in nominal terms from its September 3, 1929 peak to its July 8, 1932 trough. That figure captures the broad scale of the market’s destruction of nominal equity values, but it does not by itself tell the full story: short‑term collapses, banking failures, deflation, policy responses, and long recovery times all matter when interpreting that 89 percent figure.

For a clearer perspective, compare price indices to total return series, and consult multiple historical datasets. If you want help accessing long‑run index data or annotated timelines for study, Bitget’s educational resources can help point you toward reputable historical datasets and explanations.

References (primary sources and historical summaries cited in this article):

• The Stock Market Crash of 1929 and the Great Depression — Investopedia (Leslie Kramer).
• Americans React to the Great Depression — Library of Congress.
• Stock market crashes on Black Tuesday — HISTORY.com.
• The Great Stock Market Crash of 1929 — Hoover archives / National Archives essays.
• Stock Market Crash of 1929: Definition, Causes, and Effects — Investopedia reference articles.
• Stock market crash of 1929 Facts — Encyclopaedia Britannica.
• Dow Jones — 1929 Crash and Bear Market — MacroTrends historical charts.
• Stock Market Crash of 1929 — Federal Reserve History essays.

(Reported figures and chronology above reflect historical reconstructions and institutional summaries as of 15 January 2026.)