The New York Stock Exchange experienced the 2010 Flash Crash on May 6, 2010. U.S. equity indexes plunged rapidly during the afternoon before recovering much of the loss by the close.
The Dow Jones Industrial Average temporarily lost nearly 1,000 points, an extraordinary intraday move. Some individual securities traded at absurdly low prices, while others briefly changed hands at extremely high prices. The event exposed how fragmented and automated modern markets had become.
Investigations found that a large automated sell order in E-mini S&P 500 futures contributed to the turmoil. High-frequency traders and other automated systems interacted with the selling, creating a feedback loop of rapidly changing orders and executions.
The crash differed from a traditional bear market because most of the decline and recovery happened within minutes. Regulators introduced or strengthened safeguards, including trading pauses and rules intended to prevent clearly erroneous executions.