The Dow Jones Industrial Average lost 998.5 points during the May 6, 2010 Flash Crash before recovering much of the decline. The plunge occurred within minutes and briefly erased nearly $1 trillion in market value across US equities.
Investigations found that the episode involved a combination of market conditions, automated trading, high-frequency trading activity, and a large sell order. The rapid interaction of algorithms and reduced liquidity caused prices in many securities to move far more violently than ordinary news could explain.
The crash exposed weaknesses in market safeguards and led US regulators and exchanges to introduce or strengthen mechanisms such as circuit breakers and rules addressing clearly erroneous trades. It is often confused with a conventional bear market because the numerical loss was large, but the defining feature was its extreme speed and partial same-day recovery.