Why is Wall Street so powerful in world’s economy and finance

Oluwatoni Olujinmi

Wall Street is certainly one of the most famous and powerful streets in the world. Located in Manhattan, New York City, it takes its name from the fact that the city walls once stood along this street.

It is famous worldwide because of its importance in the world of finance and economics. It is the centre of New York’s financial district and is of such importance that the New York Stock Exchange (NYSE) is often referred to as Wall Street. The stock exchange is in fact located on this historic street.

How the Wall Street Stock Exchange works and why is it so powerful

If you are wondering what it is, you should know that Wall Street is the main stock market or exchange in the United States, also known as the New York Stock Exchange or NYSE. The main indices that make up the stock market are the Dow Jones, the Standard & Poor’s 500 (S&P 500), the Nasdaq 100 and the Nasdaq Composite.

In addition, the shares traded there are denominated in US dollars, even if the company is not a US company.

The largest company listed is Apple, although Google has contested the position on several occasions.

History of Wall Street as a financial institution

It is the history itself that gives it importance. Here are the fundamental points in its history.

  • 1762 – Wall Street is no longer home to the slave market;
  • 1792 – Merchants meeting under a tree on Wall Street create their own association through the Buttonwood Agreement, thus giving rise to the New York Stock Exchange;
  • 1889 – To mark the importance Wall Street had acquired in the financial sphere, the daily newsletter “Customer’s Afternoon Letter” was renamed “The Wall Street Journal” and gave further notoriety to the street as it was the most widely circulated newspaper in the USA for many years and still holds great importance today;
  • 1914 – The ‘House of Morgan‘, a bank of great importance to American finance, is built on Wall Street;
  • 1920 – The notorious ‘Wall Street bombing‘ took place by the ‘American Anarchist Fighters’, who after leaving a warning in a letterbox on the corner of Broadway and Cedar Street detonated a bomb in front of the bank. The explosion resulted in several dead and many injured;
  • 1929 – The notorious ‘Great Wall Street Crash‘ followed by the ‘Great Depression‘ occurred. It is a period of instability, the development of Wall Street, even architecturally, seems to come to a halt. The core of the financial district moves to the Trade Center complex;
  • 2001 – An attack causes the destruction of the World Trade Center and Wall Street loses business due to a relocation to New Jersey. Decentralisation ensues with plants in Boston and Chicago. Thanks to various concessions Wall Street is seeing a period of renewal, especially in the area of architecture.

What is its importance in the stock market?

At the moment, Wall Street is of immense historical importance in the world of finance.

And although it is attempting to regain practical importance, we are unlikely to find ourselves in a situation similar to the past.

Since with the current development it would be counterproductive to incentivise all financial companies along a single street.

Read also: The world is moving East: how and when will China overtake the US as largest economy

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