Markets Echo 1987 as S&P Futures Drop Sharply on Tariff Shock and Growth Fears
The S&P 500 futures tumbled more than 3% on Monday (Apr 7), deepening a week-long selloff. If the decline continues, it could mark the worst 3-day loss for U.S. equities since Black Monday in 1987.
While history doesn’t repeat itself, it often rhymes — and what’s unfolding now draws eerie parallels to the market crash of October 1987.
On October 19, 1987, the Dow Jones Industrial Average plummeted 22.6% in a single day, wiping out over $500 billion in market value in the U.S. alone. This event, now infamous as Black Monday, triggered a global cascade of losses: London’s FTSE 100 dropped 11%, Australia’s market fell over 40% in a month, and Hong Kong’s Hang Seng Index lost nearly half its value within a week.
The root causes were layered: a long bull run since 1982 had led to overvaluation, compounded by rising interest rates, growing trade deficits, and mounting anxiety. The immediate trigger? An automated hedging strategy called portfolio insurance, which sold index futures during downturns — a tactic that backfired and amplified the crash. Add to that the rise of program trading and the volatility spike from triple witching just days before, and a full-blown panic unfolded.
In 2025, markets are once again flashing red. The Trump administration’s sweeping new tariffs, coupled with global growth fears, have led to steep losses and mounting volatility. S&P 500 futures are down more than 3%, prompting some analysts to warn of a "2025 version of Black Monday."
Just like in 1987, today’s turmoil is fueled by a mix of structural fragility and external shocks — in this case, policy uncertainty and concentrated risk exposures.
Interestingly, gold prices — often seen as a safe haven — continue to rise despite short-term corrections, supported by central bank buying and geopolitical tensions. Some forecasts suggest gold could test $3,255 per ounce in the coming week. In contrast, silver, with its strong industrial demand link, remains more volatile and less reliable as a defensive asset.
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