The 2010 Flash Crash occurred on May 6, 2010, briefly erasing nearly $1 trillion in U.S. market value.
During the afternoon of May 6, major U.S. stock indexes fell extremely rapidly before recovering much of the loss. Individual securities also experienced extraordinary price movements, with some trades executed at implausibly low or high prices. The event exposed how quickly electronic markets could transmit selling across venues.
A joint investigation by U.S. regulators concluded that a large sell order in E-mini S&P 500 futures, combined with high-frequency trading and stressed market conditions, contributed to the disruption. The exact market mechanics were complex, involving liquidity withdrawal, automated responses, and fragmented trading systems.
The Flash Crash was not a conventional multi-month bear market like 2008. Its defining feature was speed: a dramatic intraday collapse followed by substantial recovery. Regulators later strengthened safeguards, including circuit breakers and rules for clearly erroneous trades.