Which 1989 trading event caused a sudden plunge in U.S. stock prices after computerized orders overwhelmed the market?

The October 1989 mini-crash caused a sudden plunge in U.S. stock prices after computerized orders overwhelmed the market.

On October 13, 1989, the Dow Jones Industrial Average fell 190.58 points, or about 6.9%, in a sharp late-session decline. The event became known as the October 1989 mini-crash or Friday the 13th mini-crash. It followed the collapse of a proposed leveraged buyout of United Airlines’ parent company, which raised concerns about financing and credit conditions.

Program trading and portfolio strategies were important parts of the market structure at the time. Large automated sell orders could worsen a decline when liquidity was limited, although the event was not simply a computer malfunction. The crash also showed how corporate-finance news could quickly affect broad market sentiment.

It is often confused with Black Monday in 1987, which was much larger and occurred two years earlier. The 1989 episode was serious but comparatively short-lived, and it did not produce the same sustained global panic as the 1987 crash.