The 2010 Flash Crash occurred on May 6, 2010, when U.S. stocks plunged and rapidly recovered.
During the afternoon of May 6, major U.S. indexes dropped sharply within minutes. The Dow Jones Industrial Average temporarily lost nearly 1,000 points, then recovered much of the fall before the session ended. Many individual securities briefly traded at extremely low or high prices.
Investigations concluded that automated trading and unusually large selling pressure interacted with thin market liquidity. A later U.S. Department of Justice case identified trader Navinder Singh Sarao’s spoofing activity as a contributing factor, though the event resulted from several interacting market conditions rather than one simple cause.
The episode led exchanges and regulators to introduce stronger controls, including circuit breakers and procedures for reviewing clearly erroneous trades. It differed from a conventional bear market because the sharpest movement occurred within one trading session and much of it reversed quickly.