According to visualcapitalist.com, the total value of all the stock markets in the world is around $69 trillion dollars, of which, the United States markets represents about $26 trillion dollars, in which in any given year, America's economy as represented by Gross Domestic Product (GDP) is about $18 trillion dollars. All of these above numbers are absolutely massive and difficult to comprehend on just about any human level. The pundits, financial programs, as well as media of all sources, basically like to present the stock market as inherently stable, in fact, there are those that actually believe that stock prices pretty much represent a fair reflection of their real value because equity markets are efficient.
While there may be truth in the sentiment that markets are efficient, relatively stable, and surprisingly quite liquid, there are times, though, that these circumstances aren't true, whatsoever. This then is the very thing that should worry people as well as the institutions that have significant investments in markets, whereupon they assume that there isn't any real risk, whereas these investments which appear stable, can in fact, become unstable within a very short period of time, which will create the type of havoc that brings down governments, nations, and devastates lifetime savings, all essentially accomplished in the blink of an eye.
Fortunately, America is the market of markets, because it is global in nature, experienced, highly valued, and the touchstone, in addition to its being secure and most vigorous in its efforts and abilities to handle just about any circumstance, yet, it cannot handle every circumstance, especially things that are "black swan" events, and black swan events, most definitely, do occur. For instance, as much as the stock market historians want to discuss ad nauseam the crash of 1929, the actual biggest crash in the history of the market, occurred on black Monday, 10/19/1987 when the Dow Jones dropped 22.61% in a single day, which means, that this crash occurred in the modern age, though, of course, the experts say, they've learned from this experience and so subsequently this will never occur again.
The thing about life which applies also to markets, is that for the most part people are fairly rational, but when a sudden and unexpected event occurs, such as a real fire occurring in a crowded theatre, the response can easily be a massive and hysterical panic and subsequently an overwrought tragedy caused by this reaction, as opposed to a more reasoned response that would reduce such to lesser and more manageable consequences.
There is absolutely no reason not to believe that markets can and will become irrational in their response when some particular event occurs that upsets greatly the normal equilibrium of the market. In addition, when institutions and investors are leveraged, or even overleveraged, and the market has quickly turned against them, these people are going to, whether automatically set or not, respond in a manner that protects themselves and their assets, which often means a flight from equity assets into liquidity, such as cash, in order to protect themselves, and as markets slide, these asset value drops cascade on top of each other, creating margin calls and further selling, and thereby a full-on panic ensues. After all, when there are no buyers, or buyers who say to themselves, why buy now, when it's only going to go down lower, than the market drop on what you once thought was fairly stable, can be sickeningly fast and the ramifications of such a drop can destabilize anything and everything.