More specifically, people's perceptions of information. At some points in time, the information environment is very uncertain (like right now). People have no idea what the human toll of this will be. What the government's response will be. What the effect on business will be. How long the effects will last. That's why there is so much volatility.

These questions will not be completely resolved anytime soon (years). But traders are responding to information that hints to possible answers.
There is nothing inherently wrong with volatility. It is just caused by information discovery/processing.

Eventually the information environment will be more clear and it will stabilize. But there is no reason to stop things until we get there. If you paused markets now, you will just see either a huge jump or huge crash once you open them up again because they will reflect the information at that time.


Also, a key thing to remember is that there are 2 sides to every transaction
And both sides are getting into the transaction voluntarily for specific reasons. By shutting down the market, you are preventing people from doing what they want to do.


Imagine the market was shut down for a month.
What if you need cash tomorrow? You can't sell your stocks to get it.
What if you think things are overblown? You can't buy stocks to reflect your optimism.
What if you think things are going to get a lot worse? You can't sell stocks to reflect your pessimism.

Each of these things (needing cash, optimism, pessimism) happen every day. There is nothing special about right now other than great uncertainty and prices going down (because the information coming out is all bad).