A cloud is made of billows upon billows upon billows that look like clouds. As you come closer to a cloud you don't get something smooth, but irregularities at a smaller scale.
Although computer memory is no longer expensive, there's always a finite size buffer somewhere. When a big piece of news arrives, everybody sends a message to everybody else, and the buffer fills.
When the weather changes, nobody believes the laws of physics have changed. Similarly, I don't believe that when the stock market goes into terrible gyrations its rules have changed.
