In this episode of This Week in Wall Street History, Todd M. Schoenberger tells the story of how the U.S. stock market reacted to the attack on Pearl Harbor (December 7, 1941) and traces the price action in the days and weeks that followed. We compare that episode to how markets behaved after September 11, 2001—including the NYSE/Nasdaq shutdown and the dramatic reopening on September 17. Learn the key metrics (one-day moves, trading halts, sector winners and losers), why the market responses differed, and what history teaches investors about risk, liquidity, and policy backstops during national crises.
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Pearl Harbor — Dec. 7, 1941
The attack occurred on a Sunday; U.S. markets were closed that day. On Monday, Dec. 8, 1941 (first trading day after the attack) the Dow opened down roughly 2.9% (sources vary between ~2.9%–3.5% for the immediate one-day decline). Over the following weeks the market experienced additional weakness but recovered the December losses within about a month as wartime mobilization reshaped the economy. Over the course of WWII the Dow eventually produced strong multi-year gains.
The NYSE and Nasdaq shut down on Sept. 11 and remained closed until Sept. 17—the longest U.S. market halt since the 1930s. When markets reopened on September 17, 2001, the Dow plunged 684 points (≈7.1%) on the first trading day back, with heavy losses concentrated in airlines, insurance, travel and leisure—while defense and security-related names saw gains. The Fed and Treasury acted quickly to supply liquidity and calm money markets.
Why the responses differed
Timing & context: Pearl Harbor happened before modern electronic markets, deposit insurance, and an institutionalized lender-of-last-resort—yet wartime production and fiscal stimulus converted the shock into a long-term economic expansion. The 9/11 attacks hit a highly interconnected, service-heavy economy; physical damage to the financial district plus fear of follow-on attacks prompted a multi-day market closure and a sharper initial drop when trading resumed.
Markets can react sharply in the short term but often look past shocks when economic fundamentals or policy responses change the trajectory (e.g., wartime mobilization, massive liquidity injections).
Sectoral impacts are uneven: transportation, travel, and insurance suffer most after attacks; defense, security contractors, and certain tech/pharma names can outperform.
Policy/market plumbing matters: modern backstops (Fed liquidity, deposit insurance, circuit breakers, electronic trading) change the shape and speed of recoveries compared with 1941.
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