A brief history of Wall Street
When did Wall Street start?
The first traders and speculators on Wall Street gathered under a buttonwood tree to buy and sell securities. In 1792 they formalised under the Buttonwood Agreement, which introduced rules to make trading more structured.
What was the first US stock exchange?
The New York Stock and Exchange Board was formed in 1817, as a continuation of the Buttonwood Agreement. The board began renting dedicated spaces for securities trading, moving locations several times in its first few decades.
In 1865, it was moved to its permanent home at 11 Wall Street, where it still stands today.
The Wall Street Journal and the Dow Jones
A daily stock report initially called the Customers’ Afternoon Letter was renamed in 1889, becoming The Wall Street Journal. A few years later, in 1896, The Wall Street Journal began publishing the average prices of several key stocks on the NYSE, as compiled by Charles H. Dow – the original Dow Jones Industrial Average.
The Dow Jones may have started out focusing solely on stocks listed on the NYSE, but today none of the main stock indices in the US do:
- The Dow Jones features companies from both the NYSE and the NASDAQ
- The S&P 500 and Russell 2000 also feature companies listed on both exchanges
- The NASDAQ composite and NASDAQ 100 only feature companies listed on the NASDAQ
Black Tuesday, and other crashes
In 1929, the Wall Street crash caused stock prices to plummet, creating chaos on Wall Street and ushering in the Great Depression. On 29 October, known as Black Tuesday, the NYSE saw quadruple the normal trading volume as furious selling took hold and the Dow Jones dropped over 12%.
While the crash remains notorious for its long-lasting effect, it is just one of many events that have rocked Wall Street over the years. Others include:
- Black Monday, 1987: the Dow Jones index fell 22.61%, or 508 points, in a single day – still the largest percentage drop in its history
- Friday 13 mini crash, 1997: after a failed buyout of UAL Corporation, owner of United Airlines, US indices plunged
- Dotcom bubble bursting, 2000: after peaking on 10 March, 2000, the NASDAQ fell 78% over 30 months as overhyped internet companies began to falter
- 2008 crisis: the collapse of Lehman Brothers on 15 September 2008 marked the start of a lasting crisis that played havoc across US indices
Wall Street today
The actual street’s heyday as a financial hub has long passed, even though it is still home to the NYSE and several other financial institutions. Digital trading has lessened the need for a central location to buy and sell securities, and as a result many of the major New York banks have moved further afield.
But Wall Street has grown beyond its geographical boundaries, and today represents an economy that is larger than ever. And with such a long and illustrious history behind it, few would predict that Wall Street’s influence on the global stage will diminish any time soon.