Historical Development of the U.S. Stock Market
Explore the historical evolution of the U.S. stock market from colonial times to its current dominance. Learn about key events, the founding of major exchanges, and its impact on the global economy. This overview highlights how Wall Street transformed into the world's financial hub over two centuries.
The U.S. stock market has evolved over a century, shaping the global economy. Its roots trace back to early colonial times and have grown through significant events and innovations.
Early Foundations
1600s: Dutch settlers and traders in New York built a wall for protection, which later became Wall Street, the heart of American finance.
March 1792, New York City: A group of prominent traders met secretly at Corre’s Hotel to establish a structured securities market, seeking to challenge existing auctioneers.
Formation of Exchanges:
May 17, 1792: The traders signed the Buttonwood Agreement under a tree on Wall Street, officially founding the New York Stock Exchange (NYSE), setting rules for trading and fees.
Early 1800s: The Philadelphia Stock Exchange, established in 1790, became a model. NYC's traders formed the New York Stock & Exchange Board (1817), evolving into NYSE.
Initially exclusive, membership was tightly controlled through voting. Seat prices rose from $25 in 1817, reaching $400 by 1848.
20th Century Milestones:
Wall Street saw massive fortunes in the early 1900s. The 1907 panic led to significant stock sell-offs and bank consolidations. The 1929 Black Tuesday crash wiped out billions, causing widespread panic and suicides, prompting the SEC's creation in 1934 to regulate markets. NASDAQ debuted in 1971, further shaping trading.
The NYSE remains the world's largest stock exchange today, with a market cap surpassing all major global exchanges combined.
