Wall Street is on the verge of the worst crash since 1987, and experienced market commentator Jim Cramer is sounding the alarm. In his warning, Cramer stated that, if President Donald Trump does not abandon his aggressive trade policy, there is a danger that the global economy will fall into complete chaos.
“If the president doesn’t try to reach out and reward countries and companies that play by the rules,” Cramer warned, “then we are heading for a 1987 scenario – the one where we dropped for three days, and then on Monday lost 22 percent.”
For those who have forgotten or were not even born then – Black Monday, October 19th, 1987, recorded a drop of the Dow Jones Industrial Average (DJIA) of 22.6 percent in one trading day. The S&P 500 fell even more, losing 30 percent of its value. The crash shook global markets and remains the largest one-day loss in Wall Street history.
Cramer, host of Mad Money on CNBC and founder of the portal TheStreet, sees worrying similarities between the situation then and now. On Friday, April 4th, United States (U.S.) markets recorded their worst losses since the COVID-19 pandemic. More than 5 trillion dollars of market value evaporated in a single day. The Dow dropped by over 2.200 points (5.5 percent), the Nasdaq by more than 900 points (5.82 percent), and the S&P 500 by nearly 6 percent.
Futures (one of the most traded financial instruments on stock exchanges worldwide) on the Dow Jones have already dropped by more than 1.500 points, while futures on the S&P 500 and Nasdaq dropped by 4.9 percent and 5.7 percent, respectively, announcing a bloody Monday.
The cause? Trump’s sudden imposition of tariffs – some as high as 49 percent on imports from a range of countries, including China, India, the European Union (EU), and even traditional allies such as the United Kingdom (UK) and Israel.
Trump, however, dismissed concerns about the upcoming crash, ignoring the massive global sell-off.
“Sometimes you have to take the medicine to cure something,” he stated, clearly indicating that he will not back down unless countries agree to trade terms favorable to the U.S.
“I spoke to many leaders – European, Asian, from all over the world,” Trump told reporters.
“They can’t wait to make a deal. And I told them: we will no longer have deficits with your country. We will have a surplus, or in the worst case – zero.”
Despite attempts by his associates to calm the markets – claiming that more than 50 countries are ready to negotiate – the president’s hardline stance has only increased investor anxiety.
Cramer’s warnings are not an exaggeration. The ingredients that led to Black Monday in 1987 are present today as well: Overvaluation – just like in 1987, markets at the beginning of 2025 were recording highs and dizzying growth; Policy mistakes – back then it was rising interest rates and a growing trade deficit; today it is Trump’s sudden tariffs that have shaken supply chains and caused fear of a global trade war; Automated trading – in 1987, early automated trading programs triggered a flood of sell orders. In 2025, sophisticated algorithms and AI-supported trading are accelerating panic at an incredible speed; “Triple witching” – back then, volatility suddenly spiked due to the simultaneous expiration of options and futures contracts, a phenomenon known as “triple witching.” Last Friday saw a similar spike in volatility.
The damage is not limited to the U.S. market. Asian and European markets are already reacting strongly: Hong Kong’s Hang Seng dropped by 12.3 percent, Japan’s Nikkei by 7.83 percent, and China’s CSI 300 by more than 8 percent, Klix.ba writes.
