In the 2010 U.S. Flash Crash, the Dow Jones Industrial Average lost nearly 1,000 points within minutes.
On May 6, 2010, major U.S. stock indexes fell rapidly before recovering much of the decline. The Dow’s drop was roughly 1,000 points, about 9%, and the S&P 500 and Nasdaq also experienced abrupt losses. Some individual securities briefly traded at extremely low or high prices.
Investigations linked the event to interactions among high-frequency trading, automated order systems, and a large sell order in the futures market. The U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission later concluded that a trader’s activity helped trigger the plunge, while algorithmic trading amplified it.
The crash led to safeguards including circuit breakers and tighter monitoring of unusual market activity. It differed from a traditional economic crash because the sharpest movement happened in minutes and was partly reversed the same day.