The sharp stock market decline in 1957 began before the recession and before the public became aware of the flu problem. More likely reasons for the late October lows were a confrontation that fall between federal officials and Arkansas’s governor over the integration of public schools and rising Cold War tensions.
The USSR launched Sputnik I, the world's first artificial satellite, on October 4, 1957 for the International Geophysical Year (IGY). The IGY—July 1, 1957 to December 31, 1958—was established by the International Council of Scientific Unions because high cycles of solar activity were expected at that time. The Council wanted satellites to be launched during that time to map the surface of the Earth.
Sputnik I took the world by surprise and alarmed the United States. Many US citizens hoped and believed America would launch the first satellite. People feared that the ability to launch a satellite confirmed the ability to launch nuclear missiles and that the United States was falling behind technologically. The event also prompted investor consternation.
The US Department of Defense approved spending for a second satellite project, Explorer, fearing the existing IGY satellite project, Vanguard, was not impressive enough. Explorer—launched on January 31, 1958—discovered magnetic radiation belts around the Earth and was the first of a series of small spacecraft launched with the goal of scientific discovery.
Sputnik launched the space age, the space race between the United States and the USSR, heightened arms race and Cold War tensions, and it led to the creation of the National Aeronautics and Space Administration (NASA) in an act of Congress passed in July 1958.
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