The 2010 Flash Crash took about 36 minutes to erase and then partly recover major U.S. equity values.
On May 6, 2010, U.S. markets experienced an exceptionally rapid plunge. The Dow Jones Industrial Average fell by roughly 1,000 points, or about 9%, in intraday trading before recovering much of the loss. The event affected stocks, futures, options, and exchange-traded products.
Investigations found that automated trading and a large sell order in E-mini S&P 500 futures helped interact with already fragile market conditions. Liquidity disappeared in some securities, producing unusually extreme prices. A trader later pleaded guilty to spoofing-related conduct connected to the event, although the crash’s mechanics involved many participants and systems.
The episode led U.S. regulators and exchanges to strengthen safeguards, including circuit breakers and rules for clearly erroneous trades. It is called a flash crash because the main disruption unfolded within minutes, unlike the prolonged declines associated with 1929 or the dot-com bubble.