The 2010 Flash Crash caused the Dow Jones Industrial Average to lose nearly 1,000 points intraday on May 6, 2010.
During the afternoon session, major U.S. stock indexes plunged rapidly before recovering much of the decline. The Dow’s fall was approximately 1,000 points, or about 9%, within minutes, making the event one of the most dramatic modern examples of market instability.
Investigations linked the episode to interactions among high-frequency trading, automated selling, liquidity withdrawal, and a large sell order. The market’s structure allowed prices to move extremely quickly when available buyers temporarily disappeared.
The event differed from a conventional multi-day crash. Much of the decline and recovery occurred on the same day, and regulators later introduced safeguards such as circuit breakers and improved controls for erroneous trades.