It was a bad session on Wall Street overnight.
Following comments from Fed Chair Janet Yellen that “equity-market valuations at this point generally are quite high”, stocks slipped into the red, continuing the skittish trade that’s been a feature of markets for the vast majority of this year.
However, it could have been worse. Far worse.
It was exactly five years ago, overnight, that the US stock market “flash crash” rattled investors, sending the Dow Jones Industrial Average down close to 1000 points in the space of just five minutes. The plunge, which wiped over $1 trillion in the value from US stocks, was breathtaking to watch – both the initial fall and the subsequent recovery.
It was enough to see even the most experienced of traders freeze in panic.
As a reminder as to what can happen when low liquidity and market automation goes wrong, here’s a quick video that goes some way to reliving what it was like to watch the events of day live.