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Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.

History of US stock markets

The history of US stock markets is a history of Wall Street: the eight-block area of New York that grew to become the most famous financial district in the world, and is now synonymous with the entire US financial sector.

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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.

Why is Wall Street so important?

These days, when traders and analysts talk about Wall Street, they are referring to the US financial sector – the banks, exchanges and investment firms in every American city combined.

Today, the US is the world’s biggest economy with a 2016 GDP of $18,569 billion: around 25% of the world’s total. It has also got the world’s most valuable listed companies, estimated to be $27,352 billion. And it is Wall Street that has been the driving force behind America’s rise to becoming the world’s leading financial hub.  

Wall Street stock exchanges

The most famous inhabitant of Wall Street is undoubtedly the New York Stock Exchange (NYSE). Nicknamed ‘The Big Board’ and located at 11 Wall Street, it is by some distance the largest stock exchange in the world by market cap.

Who owns the NYSE?

The NYSE is owned and operated by a company called Intercontinental Exchange, and has been since 2013. Intercontinental Exchange is itself a listed company, meaning its shares can be bought and sold on the NYSE.


While not located on the street itself, the NASDAQ is just around the corner at One Liberty Plaza on Broadway. It was launched as the world’s first electronic stock exchange in 1971 and is now the second biggest exchange in the world.

Wall Street and the Dow Jones

At IG, we use the term Wall Street to refer to our market based on the flagship US index, the Dow Jones Industrial Average. The Dow is comprised of 30 of the biggest listed companies in the US, and is used by traders and analysts as an indicator of the performance of US stock markets as a whole.

Many traders use the Dow as a benchmark to judge the performance of other investments – assessing whether an investment would have been worthwhile by comparing its price history to the price of the Dow over the same timeframe. 

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