The 2010 Flash Crash caused a brief, extreme plunge in major U.S. stock-market indexes on May 6, 2010.
During the afternoon of May 6, U.S. equity markets fell rapidly and then recovered much of the loss within minutes. The Dow Jones Industrial Average temporarily lost nearly 1,000 points, while individual securities and exchange-traded products displayed unusually large price swings.
Investigations by U.S. regulators concluded that the event involved an interaction between high-frequency trading, large sell orders, and rapidly deteriorating market liquidity. A later U.S. Justice Department case centered on trader Navinder Singh Sarao, whose spoofing activity was associated with the episode, although the crash resulted from multiple market factors.
The Flash Crash is distinct from a conventional prolonged bear market. Its defining feature was the extraordinary speed of the decline and partial rebound. New safeguards, including trading pauses and circuit-breaker rules, were introduced or strengthened afterward.