What was the first U.S. stock-market crash caused largely by computer-driven trading?

The 1987 Black Monday crash is widely regarded as the first major U.S. stock-market crash caused largely by computer-driven trading. On October 19, 1987, automated portfolio-insurance strategies and other programmed orders accelerated selling in already nervous markets.

Portfolio insurance used computer models to sell futures or stocks as prices declined, aiming to limit losses. When many investors followed similar rules, the strategy could reinforce downward momentum rather than stop it. The result was an extraordinary one-day fall: the Dow Jones Industrial Average dropped 22.6%.

The crash exposed weaknesses in market coordination and settlement systems. Regulators and exchanges responded with circuit breakers, which can pause trading after specified declines. The crash did not prove that computers alone caused the collapse; interest rates, trade tensions, valuation concerns, and market structure also contributed. The 2010 Flash Crash was a later computer-era disruption and is therefore not the best answer to this historical first.