When herd-driven hype and overly optimistic market participants collide, even the sturdiest of assets can tumble. This is what happened in the 2025 global market crash when political policy shifts, inflated tech valuations and global debt risks collided to send markets tumbling. Thankfully, it’s not a crash that’s likely to cause lasting damage but it’s a reminder of how fragile markets can be and why risk management is the first lesson every trader needs to learn.
The most infamous crash of all was the 1929 Wall Street Crash, which collapsed over several days in October that became known as Black Thursday and Black Tuesday. It set off the Great Depression and reshaped global financial systems with sweeping reforms.
One of the key lessons from that period was that automation can magnify volatility just as it can streamline trading. This is why modern markets feature circuit breakers that halt trading when there’s a sudden, pre-defined decline. Those market shutdowns helped prevent the panic selling that caused the 1987 crash.
Events that slow growth, raise inflation or disrupt supply chains tend to shake markets the most. The COVID-19 pandemic was among the most severe and it took almost a year for markets to recover through the shutdowns, shutdown costs and supply-chain disruptions that it unleashed.
But the most dangerous aspect of this sell-off wasn’t the speed or magnitude of the losses but the concentration of those losses in certain sectors. Big Tech stocks-especially AI heavyweights like Nvidia, Apple and Palantir-led the early retreat as investors re-priced their valuations.
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