Black Monday 2.0 on cards? What happened in 1987 market crash? Why do experts warn of another ‘bloodbath’ | All we know

Black Monday, October 19, 1987: Markets across the world crashed, with the US Dow Jones Industrial Average plunging 22.6%, the largest one-day percentage loss in its history.

Fast forward to 2025. On Sunday, April 6, 2025, Jim Cramer, American TV personality and market analyst, warned of a similar ‘bloodbath’ on April 7, Monday, owing to US President Donald Trump's tariff tantrums that have spooked markets worldwide so far. Cramer encouraged the POTUS to ‘reach out’ to countries that have not imposed retaliatory tariffs, apparently to avoid a similar rout across global markets.

Also Read: ‘Black Monday’ of 1987 ahead? Expert warns of ‘bloodbath’ in global markets on April 7 amid Trump tariff turmoil

Now, why did the ‘Mad Money’ host urge Trump ‘to reach out to countries’ that ‘play by the rules’? What led to the Black Monday in 1987? What exactly happened? LiveMint explains.

What happened on Black Monday?

October 19, 1987, also known as ‘Black Monday’, saw the Dow Jones Industrial Average (DJIA) plummet by 22.6% in just one day. This event triggered a global stock market downturn, cementing Black Monday as one of the most infamous days in financial history. The S&P 500 experienced an even steeper decline, falling by 30% on the same day.

The mayhem continued throughout the month, and by early November 1987, most major stock market indexes had lost over 20% of their value.

What led to the Black Monday in 1987?

The 1987 stock market crash wasn’t triggered by a single event but rather a combination of factors:

1. Bull market needed correction: Black Monday was driven by a strong bull market that needed a major price correction, as stock values had tripled since 1982.

2. Computerised trading: Computerised trading, which was still in its infancy in 1987, was a major driver of the Black Monday c. Program trading removed human decisions, with automatic buy or sell orders triggered by benchmark indices.

The computers tended to produce more buy orders when prices were rising and more sell orders when prices fell. As sell orders flooded the market on October 19, it spurred other investors to sell in a panic reaction.

3. Triple Witching: In 1987, October 16, the Friday before the crash, the simultaneous expiration of stock options, stock index futures, and stock index options contracts, collectively called triple witching, resulted in extremely high volatility on the last hour of Friday trading, collectively called triple witching. This resulted in extremely high volatility on the last hour of Friday trading, with large sell-offs in the after-hours markets, leading to the Black Monday.

Black Monday 2.0 ahead?

Experts warned of Black Monday 2.0 after the US stock markets witnessed their worst trading session and the largest drop since the COVID-19 global pandemic, on Friday, April 4. Over $5 trillion was wiped off market capitalisation, and the key benchmark indices bore severe losses.

What did Cramer say?

“If the president doesn't try to reach out and reward these countries and companies that play by the rules, then the 1987 scenario... the one where we went down three days and then down 22 per cent on Monday, has the most cogency,” said Cramer.

On April 6, Sunday, Dow Jones futures dropped 1,405 points (3.7%) signalling a potential ‘Black Monday’. S&P 500 futures fell 4.3%, and Nasdaq-100 futures tumbled 5.4% as investors sold off former tech stars to raise cash.