The 1973–1974 stock market crash, which saw a ~50% drop in major indices, was primarily caused by the OPEC oil embargo, rampant inflation, and the Watergate scandal. This combination led to a severe, two-year bear market, compounding economic panic with high oil prices and political uncertainty surrounding President Nixon's resignation.
The crash came after the collapse of the Bretton Woods system over the previous two years, with the associated 'Nixon Shock' and United States dollar devaluation under the Smithsonian Agreement. It was compounded by the outbreak of the 1973 oil crisis. It was a major event of the 1970s recession.
A 2019 study by Harvard Business Review found either Vanguard, BlackRock or State Street is the largest listed owner of 88% of S&P 500 companies. There is a perception that a few select companies own a vast majority of the stock market.
Among the causes were the 1973 oil crisis, the deficits of the Vietnam War, and the fall of the Bretton Woods system after the Nixon shock.
1. The peak in business activity preceding the recession of 1973-1975 came in November 1973. The trough marking the end of the recession came in March 1975. Thus the twenty-eighth recession in the National Bureau's busi- ness cycle chronology, which begins in 1854, lasted sixteen months.
$1 in 1973 is equivalent in purchasing power to about $7.30 today, an increase of $6.30 over 53 years. The dollar had an average inflation rate of 3.82% per year between 1973 and today, producing a cumulative price increase of 630.00%.
Recessions
While industry insiders are generally cautious, few expect a crash. Morgan Stanley notes “continued equity gains in 2026” with modest growth, as a lot of good news is already priced in. Fidelity's 2026 outlook is that it “could be another positive year” for the market — but investors shouldn't ignore risks.
During the 1973 Arab-Israeli War, Arab members of the Organization of Petroleum Exporting Countries (OPEC) imposed an embargo against the United States in retaliation for the U.S. decision to re-supply the Israeli military and to gain leverage in the post-war peace negotiations.
After President Nixon resigned in August 1974, Ford immediately assumed the presidency. Domestically, Ford presided over the worst economy in the four decades since the Great Depression, with growing inflation and a recession.
The 3-5-7 rule in stock trading is a risk management strategy: risk no more than 3% of capital on a single trade, keep total open position risk under 5%, and aim for a minimum 7% profit target or 7:1 reward-to-risk ratio, ensuring capital preservation and disciplined growth by setting clear limits and avoiding emotional decisions.
Since taking office, Trump has imposed a range of tariffs on countries, including key trading partners, leading to predictions of inflation skyrocketing, manufacturing screeching to a halt and unemployment soaring.
Republicans had markedly higher household income and net worth in both the graduate and sibling samples. In the graduate sample, Republicans attained slightly higher education levels.
His administration continued the banking bailout and auto industry rescue begun by the previous administration and immediately enacted an $800 billion stimulus program, the American Recovery and Reinvestment Act of 2009 (ARRA), which included a blend of additional spending and tax cuts.
An estimated 24% of US households are living paycheck to paycheck so far in 2025, according to a Bank of America Institute analysis released this week.
Defensive sectors like utilities and consumer staples often hold up better during downturns. Cash options like money markets or CDs offer stability but lower yields.