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I read that a potential reason for the stock market panic of 1987 could be the rapidly increasing long term US interest rates: the yield of 30Y US Treasury Bonds increased from the low of the year, 7.29% on 9th of January 1987 to the high of the year 10.25% on 19th of October 1987, an increase of 296 basis points.

Why this should be advanced as one of the key causes for the crash?

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    $\begingroup$ In some models investors compare bond yields to future stock returns to allocate their investment. So it is not unreasonable that an increase in bond yields could cause investors to sell stocks in order to buy more bonds (until the price of stocks is sufficiently reduced to be competitive again). But these theories are controversial and it is not clear in any case if this explains the 1987 sharp drop. $\endgroup$
    – Alex C
    Nov 12 '19 at 2:39
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The rise in yields were not a cause of the crash.

Global equity valuations were very high leading up to the crash against a solid macroeconomic backdrop in the years preceding. Eventually, growth began to fade and optimism did as well, feeding into the financial channels leading up to black Monday.

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