The major economic factor that led to the Great Depression was the stock market crash of 1929, which triggered a cascade of financial instability. This event resulted in plummeting stock prices and widespread panic, leading many to withdraw investments and savings. Banks failed, businesses closed, and unemployment soared as consumer spending drastically declined. Additionally, overproduction and underconsumption in agriculture and industry further exacerbated economic woes. The ensuing ripple effect strangled the economy, causing a severe contraction that lasted throughout the 1930s and necessitated government intervention measures like the New Deal to stabilize and revive economic growth.