The Stock Market Crash
The stock market crash of 1929 was a major contributing factor to the ultimate collapse of the American economy. Along with the failure of banks, false prosperity, and income gap, the stock market crash pushed America towards the economic depression of the 1930s (Textbook). Wall Street experienced a Bull Market during the 1920s. A Bull Market is a continuation of increasing stock market prices due to optimism and overconfident investors.
The stock market crashed in 1929, wiping out 1.5 million investors in the nation. This economic disaster "sent a message to the nation that economic prosperity was not guaranteed. The crash also significantly weakened American banks, which affected all Americans, even if they did not own stocks on Wall Street" (Textbook). Due to the crash of the stock market, other components of the American economy were negatively impacted. Along with the failure of banks nationwide, unemployment increased, and tariffs were caused. The collapse of the stock market set the oncoming economic depression in motion.