On this day in 2001, the Dow Jones Industrial Average closed one of its worst trading weeks in history, recording its largest-ever weekly loss at the time. The dramatic decline followed the 11 September terrorist attacks in the United States, which forced the New York Stock Exchange and Nasdaq to shut down for four days and triggered a wave of investor panic upon reopening.
Market turmoil after 9/11
When markets reopened on 17 September 2001, the Dow Jones plunged 684 points in a single day, at that time its biggest-ever point loss. By the end of the trading week on 21 September, the index had fallen nearly 14 per cent, erasing hundreds of billions of dollars in market value. The S&P 500 and Nasdaq also endured steep declines, as fears over further attacks and uncertainty about the global economy gripped investors.
Airlines and insurers are the hardest hit
Sectors most directly linked to the attacks bore the heaviest losses. Airline stocks collapsed as air travel was disrupted worldwide and security costs surged, while insurance companies faced unprecedented claims. Boeing, American Airlines and United Airlines all saw their valuations tumble, while firms such as AIG and Swiss Re braced for multi-billion-dollar payouts. The economic impact rippled through hospitality, tourism and financial services, amplifying the market’s historic slide.
Federal Reserve and government response
The U.S. Federal Reserve, led by Chairman Alan Greenspan, acted swiftly to restore confidence. Interest rates were cut by half a percentage point to 3 per cent, and liquidity was pumped into the banking system to keep credit flowing. The U.S. government also announced a $15 billion aid package to stabilise the airline industry and began implementing tighter security and regulatory measures across the economy.
Longer-term consequences
While markets began to recover in the weeks that followed, the 2001 crash left deep scars. The crisis underscored vulnerabilities in the U.S. economy and reshaped investor attitudes toward risk. It also highlighted the dependence of global markets on stability in the United States, as international exchanges mirrored Wall Street’s sell-off. The Dow did not return to its pre-attack level until late 2002, reflecting the drawn-out impact of 9/11 on both financial and geopolitical landscapes.
Historical significance
The record weekly loss of September 2001 stands as a reminder of how swiftly external shocks can reverberate through financial systems. It also marked the beginning of a turbulent decade for global markets, one that would later face further disruption during the 2008 financial crisis. For many investors, the events of this week in 2001 remain etched in memory as a turning point in modern market history.
REFH – Newshub, 21 September 2025
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