BBC’s business editor Simon Jack was asked: Is this a stock market crash? Here’s what he has to say:
As stock markets continue to tumble after the US imposition of sweeping and swingeing tariffs, many are asking does this qualify as a stock market “crash”.
The word crash has been used sparingly over the decades and is usually reserved for a fall of over 20% from a recent peak in a day or over the course of a couple of days.
On October 19 1987 – also known as Black Monday – the US stock market lost 23% of its value in a single day – and other stock markets had similar falls. That was most definitely a crash.
In 1929, the US stock market lost over 20% of its value in two days – and 50% within three weeks. That was the famous Wall Street Crash that ushered in the great depression of the 1930s.
By comparison, the US stock market lost nearly 5% of its value yesterday and is still 5% higher than it was a year ago.
This may yet turn into a crash – some key markets are looking very weak like banks and the price of oil. But we are not in crash territory yet – although there may be few buyers willing to prop up the market going into a weekend when the world’s two biggest economies are unequivocally now in a trade war.
As one stock broker said to me this morning, if we lose 10% today it feels very “crashy”.