In 1792, a small group of stockbrokers signed the Buttonwood Agreement, the founding document of what would eventually become the New York Stock Exchange.
The earliest stock issuers were banks, insurers, and railroads that farmed investment capital by issuing stock. States and municipalities also joined in, selling bonds to fund the construction of canals, bridges, and roads in a rapidly expanding America.
By the end of the Civil War, the exchange had moved to its permanent home across Wall Street from Federal Hall, the birthplace of the U.S. government, where a statue of George Washington seems to gesture over the cobblestones toward the historical neo-classical buildings of the New York Stock Exchange and J.P. Morgan & Co.
Today, the New York Stock Exchange, the world’s largest by market capitalization, trades about $26 trillion worth of company stock, or more than half of the $40 trillion worth of securities issued by listed U.S. companies as of 2020. (These are the largest companies that didn’t exist a decade ago.)
Since 1929, the NYSE has weathered the Great Depression – in which more than half of the market evaporated in 1931 – and 14 other recessionary periods, including the two-month pandemic contraction of 2020.
The largest annualized gain of the NYSE took place in 1933, when the market rebounded by 69% in the wake of four catastrophic years. Last year, the Exchange gained 20.2% after advancing more than 22% in 2019 and 6% in 2020.
Critics of America’s asset-based economy cite the fact that the top 10% of households own 89% of all U.S. stock as evidence of growing income inequality.” Defenders of financialization argue that even if most Americans don’t benefit directly from stock-based capital gains, they benefit from the jobs and economic growth facilitated by the investment capital raised by the markets. (These are the states where income inequality has gotten worse since 2010.)
To determine the value of the Dow Jones Industrial Average the year you were born, 24/7 Wall St. reviewed daily Dow figures aggregated by the economic research website Macrotrends. Historical Dow data are inflation-adjusted using annual headline CPI in chained 2021 dollars.
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