Whether you’re an expert investor or an average American who watches the news from time to time, you’ve heard the term Wall Street. The name of this 2,625-foot-long street in New York City has become synonymous with the investment industry in the United States.
The iconic American road’s story goes back to the 1600s when the Native Americans, Dutch, and British were all vying for pieces of the promised land. Today, a different battle is waged on Wall Street — a battle between the bears and bulls dressed in three-piece suits and high-end shoes.
What Is Wall Street?
Wall Street is a small street, spanning just under half of a mile, in the Lower Manhattan section of New York City (NYC). The street spans from Broadway to FDR Drive, but I doubt you’re reading this to learn more about the road itself.
Wall Street is far more than a road.
You own shares of Apple, Amazon, Tesla. Why not Banksy or Andy Warhol? Their works’ value doesn’t rise and fall with the stock market. And they’re a lot cooler than Jeff Bezos.
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Over the years, Wall Street became home to the New York Stock Exchange (NYSE), which led to a flood of investment banks, financiers, and other financial market participants moving their businesses to the area to be closer to the action.
Today, Wall Street is still thought of as the heart of the largest financial center in the world, although in today’s market, trading happens online, and some of the world’s largest financial institutions are headquartered hundreds or even thousands of miles from this tiny road in NYC.
How Wall Street Works
The term Wall Street uses two words to describe the stock, bond, commodities, foreign exchange, and futures markets. In the very beginning, the securities market was created to raise money for companies that would use those funds to grow and create jobs.
Today, Wall Street works the same way.
Companies raise money by selling stock or bonds to investors. Stock investors share in the price appreciation of the company stock as well as potential earnings. Bond investors receive interest payments in exchange for their investments. The sales of both are used by publicly traded companies to raise the capital they need to grow.
In the past, stocks and bonds were sold as physical certificates. As technological innovations emerged, investing changed. Today, when you log into your TD Ameritrade or Robinhood account, you’re tapping into Wall Street. Thanks to the internet, Wall Street is all around us.
History of Wall Street
I remember being under the misconception that Wall Street got its name because of the massive walls from the financial industry high rises on the road. But the street didn’t start out as a financial district. It started as a border.
In the mid-1600s, Dutch colonists who settled in the Lower Manhattan area were in fear of attacks from Native Americans and the British. Peter Stuyvesant, a leader in the Dutch Colony, worked with colonists to build a wooden wall. The wall would protect the colonists, or at least slow an attack, providing more reaction time. Soon, the street on the border of the wall became known as Wall Street.
The area was prized for its access to New York’s ports — waterways through which shipments of much-needed supplies could be delivered. By the early 1700s, the area was known for trade, but it wasn’t quite a financial center; it was more of a marketplace where goods were bought and sold.
It’s rumored that in the late 1700s, some of the most prominent brokers and merchants in the new United States met to discuss business on Wall Street under a buttonwood tree. In 1792, 24 of the most successful merchants and financial institutions in the U.S. signed an agreement that outlined the process for trading securities and collecting commissions for services related to trades. The agreement — known as the Buttonwood Agreement — laid the groundwork for what would soon become the New York Stock Exchange.
The brokers involved in the agreement formally named themselves the New York Stock and Exchange Board. As a young company, the group rented out multiple commercial spaces throughout the financial district until 1865 when it purchased its headquarters at the corner of Wall Street and Broad Street.
The NYSE had finally found its permanent trading floor at 11 Wall Street.
Soon other stock exchanges started to establish themselves in the area. The American Stock Exchange, New York Board of Trade, New York Futures Exchange, and New York Mercantile Exchange all settled in the financial district.
In the late 19th century and early 20th century, investment banking and other financial institutions like JPMorgan Chase, Goldman Sachs, and even the Federal Reserve Bank began to flood into the Lower Manhattan financial district to be closer to the action and take part in the growth of free trade.
By the end of World War I, New York City had become the largest financial center in the world.
By the late 1800s, the term Wall Street referred more to the financial industry than the short road at the epicenter of American investing. In 1889, Charles Dow, Edward Jones, and Charles Bergstresser launched The Wall Street Journal, the first publication to use the street’s name as a broad term defining the U.S. investment industry.
Wall Street vs. Main Street
Wall Street is often confused with Main Street. Both are similar in that they’re based on roads, but they’re very different. Wall Street is a broad term used to describe the American investing industry. Main Street is used to describe American business, industry, employees, and consumers.
The term Main Street relates to the main road in many cities that acts as the business hub for the city. Many cities and towns grew up around such a street, often named Main Street. Unlike Wall Street, the term isn’t based on any particular Main Street, just the idea that many major cities have a Main Street in their business district.
Main Street is a term broadly used to describe typical small-town America, including independent small businesses, local communities, and everyday consumers.
Wall Street FAQs
There’s probably quite a bit you didn’t know about Wall Street, and there’s a lot to learn about its history and its present state. Chances are, you still have a few questions. Here are some answers you might be looking for:
What Time Is Wall Street Open?
Wall Street (the street) is a drivable, narrow road in Manhattan that’s open 24 hours per day. However, if you’re referring to the business hours of the financial markets, the NYSE is open from 9:30am to 4:00pm Monday through Friday. Many other financial institutions on the street follow the standard 9-to-5 business hours.
What’s the Difference Between Wall Street & Main Street?
Wall Street is a term based on a real road that’s used to describe the investing industry, financial firms, and other market participants. Main Street is a broad term that refers to American business, industry, employees, and consumers, which is based on the idea that most cities have a Main Street in their business district.
What Is Black Wall Street?
Black Wall Street is a term used to describe one of the most prosperous African American business districts in the United States in the 20th century. Today the term Black Wall Street is often used to describe any predominantly African American district that acts as a hub for business and financial activity.
What Was Occupy Wall Street?
Occupy Wall Street was a protest and movement against financial inequality in the United States that began in response to the financial crisis in the late 2000s. The movement suggested that the financial system was broken and that inequality in finance led to inequality and corruption in government.
Participants in Occupy Wall Street believed that the richest people in the U.S., representing 1% of the population, control the majority of the country’s wealth and hold undue influence over the government. Their goal was to push the 1% to improve wages for the 99% and close the income divide in the U.S.
Marked by picketing and demonstrations, hundreds of protestors began gathering in Zuccotti Park the Financial District of Lower Manhattan in September 2011. Other Occupy demonstrations in the same spirit took place in other U.S. cities and financial centers around the world.
Wall Street is a short road, but it has a long history in American culture. It was there when the Native Americans, Dutch, and British were all vying for land near New York City’s ports and throughout many other important parts of America’s financial and non-financial history.
Today, the road is more than a road; it’s how we describe investing and stock market culture — and it all started with Dutch settlers building a wooden wall.