When the Dow Jones industrial average collapsed 700 points in 20 minutes Monday afternoon and the stock market dropped from bad to cataclysmic, traders and analysts turned to an increasingly routine explanation: the machines did it. The Washington Post writes that lightening-fast trading models, automated sell orders and a large supply of sophisticated algorithms may not have been the only reason behind the biggest stock-market point drop in U.S. history, but it played a part. Investors and market experts say the machines made a crazy trading day that much crazier, scaring anyone with a retirement fund and creating an outburst of panic selling, which made Tuesday’s rebound seem even more baffling. Algorithmic trading — proprietary computer programs that can perform thousands of trades a second — are used by global markets. On Tuesday, Treasury Secretary Steven Mnuchin said that it “definitely had an impact” in Monday’s 1,175-point Dow drop. It is impossible to know just how large the effect the algorithms had but market analysts say it was not just the computers. The Post writes that “jittery trading, sky-high stock values and other unnerving market indicators had set the stage for the broader market’s sell-off. “
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