How does blood pressure substantially drop in the capillaries and arterioles?
There are two main reasons why the pressure in the capillaries is lower than in the big arteries:


Arteries are elastic - they increase in diameter with every pulse, so the blood pressure is falling as the blood is moving along.
The total cross-sectional area of the capillaries is greater than the one of the big arteries.


Biology-pages.info


  The pressure of arterial blood is largely dissipated when the blood
  enters the capillaries. Capillaries are tiny vessels with a diameter
  just about that of a red blood cell (7.5 µm). Although the diameter of
  a single capillary is quite small, the number of capillaries supplied
  by a single arteriole is so great that the total cross-sectional area
  available for the flow of blood is increased. Therefore, the pressure
  of the blood as it enters the capillaries decreases.