At any given time, global events — and the deluge of headlines about them — can contribute to significant shifts in the markets. However, history has shown us time and time again that whenever the markets experience even significant declines, they have always recovered and gone on to reach new highs. We cannot predict how long it will take for the stock market to recover, but historically, it always has.

One common denominator among all market crashes is investor panic. The markets are quite resilient; however, when events such as global crises, economic downturns and speculative bubbles happen, it can cause widespread panic among investors, who begin to sell their stocks en masse, leading to sudden and significant market downturns.

A stock market crash occurs when a broad market index, such as the S&P 500 or the Dow Jones Industrial Average (DJIA), undergoes a sudden and severe drop — typically 10 percent or more over a few days. Unlike regular market corrections, crashes are marked by their speed and intensity. In contrast, a recession is a significant, persistent, and widespread contraction in economic activity. Since the Great Depression, the United States has suffered 14 official recessions.

Following a financial crisis, the US economy typically recovers through a combination of monetary policy (actions by the Federal Reserve to manage interest rates and the money supply) and fiscal policy (government spending and tax adjustments) aimed at boosting demand and stimulating growth.

To show you how the markets have recovered, even following significant crashes, I’ve put together examples of 10 notable crashes, market events, and recoveries in U.S. history since 1980.

There are several indexes we could track, but here, I note the rises and declines in the DJIA, which is considered a gauge of the broader U.S. economy. The DJIA is a stock market index that tracks 30 large, publicly owned blue-chip companies that trade on the New York Stock Exchange (NYSE) and Nasdaq. This index is named after Charles Dow, who created it in 1896 with his business partner, Edward Jones.

As you read about these ups, downs and rebounds, I hope you will realize how critical it is to focus on your long-term vision and ignore the foreboding headlines and the inevitable market fluctuations.

1. The 1981–82 recession

(The Dow fell from 1,024 to 776 and rebounded to 875.)

The United States entered a recession in January 1980, caused primarily by a disinflationary monetary policy adopted by the federal reserve and cuts in domestic spending made by Ronald Reagan. This recession is actually considered to be two separate recessions. The “1980 recession” lasted throughout the first six months of the year, and “the early 1980s” recession lasted from July 1981 to November 1982.

From February to April 1980, the DJIA fell 16 percent. As a result, the Federal Reserve cut the Fed Funds rate to 8.5 percent. This adjustment caused the Dow to rise, and the Fed brought rates up to combat inflation. That caused the Dow to fall 22 percent. This is considered to be the worst recession since the Great Depression, except for the 2008 recession.

The Dow fell from a peak of around 1,024 in April 1981 to a low of around 777 in August 1982, representing a decline of more than 22 percent.

But then the US economy rebounded through a combination of policy changes, including deregulation, tax cuts and a reduction in government spending. Also contributing to the recovery was a shift toward a focus on controlling inflation, which eventually led to sustained economic growth.

The DJIA closed out 1980 at 963.99 and 1981 at 875.00.

2. The stock market crash of 1987

(The Dow fell from 2,247 to 1,739 and rebounded to 1,938.)

The first contemporary global financial crisis began on October 19, 1987, a day known as “Black Monday,” when the DJIA dropped 22.6 percent in a single trading session. The Dow fell from 2,246.74 to 1,738.74, a loss of 507.99 points, the largest one-day stock market decline in history.

The markets had done well in the first half of 1987. In fact, the DJIA had gained 44 percent in just seven months, by late August. In mid-October, a series of negative news reports undermined investor confidence and led to additional volatility in markets. Plus, the federal government disclosed a larger-than-expected trade deficit, and the dollar fell in value. The markets began to unravel, foreshadowing the record losses that would develop a week later.

To address the crisis, then-Fed Chairman Alan Greenspan encouraged banks to continue to lend on their usual terms. He also affirmed, in October 1987, the Federal Reserve’s “readiness to serve as a source of liquidity to support the economic and financial system.”

As a result, stock markets quickly recovered a majority of their Black Monday losses. In just two trading sessions, the DJIA gained back 288 points, or 57 percent, of the total Black Monday downturn. Less than two years later, US stock markets surpassed their pre-crash highs. The DJIA closed out 1987 at 1,938.83 points.

As central banks cut interest rates, financial markets in the United States and Europe fully recovered. In fact, five years later, markets were rising by about 15 percent a year.

3. The Asian financial crisis of 1997

(The Dow fell from 7,715 to 7,161 and then rose to 7,908.)

In the fourth quarter of 1997, currency devaluations and economic instability in Asia impacted global financial markets. On October 27 and 28, 1997, the nation’s securities markets fell by a record absolute amount on then-record trading volume.

On Monday, October 27, the DJIA declined 554.26 points, from 7,715.41 to close at 7,161.15 — a loss of 7.18 percent. And then on Tuesday, October 28, market prices initially resumed their decline before rallying sharply. The DJIA closed up 337.17 points at 7498.32, an increase of 4.71 percent. The DJIA closed out 1997 at 7,908.30.

4. The dot-com bubble on March 11, 2000

(The Dow fell from 11,723 to 7,286 and rebounded to 10,022.)

The “dot-com bubble,” also known as the “internet bubble,” occurred from 1995 to 2001. That bubble burst in 2000 due to a combination of factors, including overvaluation of tech companies, an abundance of venture capital, a media frenzy and ultimately, a shift in investor sentiment as the reality of many companies’ lack of profitability became apparent.

As the World Wide Web became available to the general public, investors rapidly made significant equity investments in internet-based companies (dot-coms). That led to inflated market valuations and a subsequent market crash. This event was characterized by a rapid rise and subsequent fall in technology stock prices.

The Dow fell from 11,722.98 on Jan. 14, 2000, to 7,286.27 on Oct. 9, 2002, a loss of

37.8 percent. However, the DJIA closed out 2001 at 10,021.57.

5. Market declines after the 9/11 attacks in 2001

(The Dow fell from 9,606 to 8,921 and rebounded to 10,022.)

Also wreaking havoc on the markets in 2011 were the terrorist attacks on Sept. 11, 2001. The unprecedented terrorist attacks on American soil increased market volatility and investor anxiety and led to a sharp plunge in the stock market. The total loss in market value was $1.4 trillion. Following the attacks, the New York Stock Exchange and the Nasdaq remained closed until Sept. 17, the longest shutdown since the Great Depression.

On the first day of NYSE trading after Sept. 11, the DJIA fell 684 points, a 7.1 percent decline. At that time, it was a record for the biggest loss in the exchange’s history for a single trading day. (This record has since been eclipsed by the market reaction during the global coronavirus pandemic). The close of trading that Friday ended a week that saw the biggest losses in NYSE history.

The DJIA closed down around 684.81 points, from 9,605.51 to 8,920.70 — the biggest one-day point loss ever at the time. However, again, the DJIA closed out 2001 at 10,021.57.

6. The stock market crash of 2008–09

(The Dow fell from 11,143 to 6,470 and rebounded to 10,428.)

The 2008 financial crisis resulted from a convergence of multiple factors, including a glut of subprime mortgages a housing bubble, risky mortgage lending, complex financial products and inadequate regulation. The collapse of Lehman Brothers and the ensuing global financial crisis led to severe market downturns worldwide.

Between 2007 and 2009, U.S. households lost more than $16 trillion in net worth. Also, the value of the stock market fell by half, unemployment reached 10 percent and the crisis turned into the Great Recession. On September 29, 2008, the DJIA had a record- breaking drop of 777.68, from 11,143.13 down to 10,365.45 at closing. And then the DJIA hit a market low of 6,469.95 on March 6, 2009, losing more than 54 percent of its value since a high on October 9, 2007.

The bear market corrected on March 9, 2009, when the DJIA rebounded more than 20 percent from its low to 7,924.56 after only three weeks of gains. The Dow closed out 2009 at 10.428.05.

7. The Eurozone debt crisis of 2010

(The Dow fell from 10,444 to 10,068 and rebounded to 11,578.)

Triggered by high levels of public debt, this period of economic uncertainty in the Eurozone began in 2008 with the collapse of Iceland’s banking system. It then spread to Portugal, Italy, Ireland, Greece and Spain in 2009. Several of these countries, including Greece, Portugal, and Ireland had their sovereign debt downgraded to junk status by international credit rating agencies during this crisis, worsening investor fears. The crisis led to a loss of confidence in European businesses and economies.

On May 20, 2010, the DJIA fell 376.36 points, from 10,444.37 to 10,068.01 its biggest point drop since February 2009.

The crisis was eventually controlled by the financial guarantees of European countries, who feared the collapse of the euro and financial contagion, and by the International Monetary Fund (IMF). The DJIA closed out 2010 at 11,577.51.

8. The COVID-19 stock market crash in 2020

(The Dow fell from 27,554 to 20,188 and rebounded to 30,606.)

The 2020 stock market crash caused by the coronavirus began on February 20, 2020, and ended on April 7. The COVID-19 pandemic led to global economic shutdowns and investor panic. During this time, the stock market experienced the three worst point drops in U.S. history.

On Monday, March 9, 2020, the Dow fell 2,014 points, a 7.79 percent drop. On March 12, 2020, the Dow set another record by falling 2,352 points to close at 21,200. It was a

9.99 percent decline and the sixth-worst percentage drop in history. Finally, on March 16, the Dow plummeted nearly 3,000 points to close at 20,188, losing 12.9 percent. The drop in stock prices was so significant that the New York Stock Exchange suspended trading several times during those days.

The DJIA recovered, closing out 2020 at 30,606.48 points.

9. Record inflation in 2022

(The Dow fell from 32,911 to 32,273 and rebounded to 33,147.)

In May 2022, gasoline prices hit a record high, and the cost of food soared, leading to the largest annual increase in nearly 40½ years. There were growing concerns about a potential recession. The DJIA fell 638.11 points to end at 32,272.79 points.

By the end of 2022, the DJIA had rebounded to 33,147.25 points.

10. The banking crisis of 2023

(The Dow fell from 31,910 to 31,819 and rebounded to 37,690.)

Early in March 2023, a banking crisis took place after a rapid rise in interest rates caused the value of Silicon Valley Bank’s (SVB’s) bonds to plummet, as well as a “run” on the bank as depositors, fearing instability, withdrew their funds. In just a few days, SVB collapsed, along with Signature Bank and First Republic. They were among the biggest banks to fail in U.S. history.

The SVB downfall triggered the largest single-day bank run in U.S. history and led to aggressive action by the Federal Reserve, FDIC, Treasury Department and others to

prevent spillovers to the rest of the U.S. banking system. As a result of this crisis, the DJIA fell 90.50 points, from 31,909.64 to 31,819.14, a 0.3 percent loss.

The Dow closed out 2023 at 37,689.54 points.

As you can see, despite persistent negative media narratives that forecast economic downturns and market crashes, the Dow Jones Industrial Average has demonstrated remarkable resilience and growth over the past decades. At the end of March 2025, as usual, the headlines are full of negative news. However, on March 28^th, 2025. the Dow was at 41,583.90.

As always, we encourage you to keep your eyes on your long-term vision at all times and avoid bailing out of the market out of fear. While there is no guarantee of investment success, historically, investors who have stayed the course and held onto their stock holdings when the market crashes have been rewarded later. Remember, investing successfully requires a long-term approach.

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Randy Carver, CRPC®, CDFA®, is the president and founder of Carver Financial Services, Inc., and is also a registered principal with Raymond James Financial Services, Inc. Carver Financial Services, Inc., was established in 1990 with the vision of making people’s lives better — clients, team and community. With this mission, Carver Financial Services has grown to be one of the largest independent financial services offices in the country, managing $2.7 billion in assets for clients globally, as of April 2024, and his team provides Personal Vision Planning^® for their clients.

You can reach Randy directly at randy.carver@raymondjames.com and in the office at (440) 974-0808.

Any opinions are those of Randy Carver and not necessarily those of Raymond James. This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete.

Investing involves risk and you may incur a profit or a loss regardless of strategy selected. No investment strategy can guarantee your objectives will be met. Every investor’s situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment decision.

The stock indexes mentioned are unmanaged and cannot be invested into directly. Past performance is no guarantee of future results.