The 2010 Flash Crash caused a huge temporary fall in U.S. stock indexes on May 6, 2010.
During the afternoon, the Dow Jones Industrial Average plunged about 1,000 points, or roughly 9 percent, within minutes before recovering much of the loss. Some individual securities traded at absurdly low or high prices, revealing how quickly computerized markets could become unstable.
Investigations found that automated trading, thin liquidity, and a large sell order contributed to the episode. The U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission concluded that a trader’s sale of a large number of E-mini S&P 500 futures contracts helped trigger the event, while high-frequency trading amplified it.
The crash led to new safeguards, including circuit breakers and trading pauses. It differed from a conventional bear market because the most dramatic losses and much of the recovery occurred within the same session.