Stock market crashes, also known as bubbles or panics, are periods of extreme volatility in the stock market. These periods of sudden and large changes in share prices may last only a day or two before calming down. But they can persist for much longer and can be devastating to those who depend on stock market returns for their retirement.

Stock prices plummet unexpectedly and suddenly in a stock market collapse. The stock market crash may result from a significant disaster, an economic crisis, or the bursting of a long-term bull market. As a result of a stock market meltdown, public hysteria can also play a significant role, causing panic selling and further depressing prices. In addition to the 1929 Great Depression, Black Monday in 1987, the 2001 dotcom bubble bust, the 2008 financial crisis, and the 2020 COVID-19 pandemic, there have been notable stock market crashes.

A stock market crash occurs when the prices of stocks decline rapidly and significantly over a short period, often resulting in panic selling among investors. This sudden and widespread decline can be triggered by various factors, such as economic downturns, geopolitical tensions, or unforeseen events like natural disasters or pandemics. During a crash, investor confidence plummets, leading to a domino effect of selling as investors rush to liquidate their holdings to minimize losses. The crash can have far-reaching consequences, including wealth erosion, job losses, and economic instability. Governments and central banks may intervene with measures like interest rate cuts or stimulus packages to stabilize the markets and restore confidence. Recoveries from stock market crashes can vary in duration and intensity, depending on the underlying causes and the effectiveness of policy responses.