The Dow Jones Industrial Average suffered its largest point drop during the 2010 Flash Crash on May 6, 2010.
During the afternoon of May 6, U.S. markets experienced an extraordinarily rapid decline and partial rebound. The Dow fell nearly 1,000 points from its intraday high, including about 600 points within a few minutes. Several major indexes and individual securities briefly traded at extremely low prices.
Investigations linked the event to interactions among market conditions, automated trading, and a large sell order in E-mini S&P 500 futures. High-frequency firms and other algorithms responded to changing prices and liquidity, intensifying the temporary disorder. Regulators later charged trader Navinder Singh Sarao in connection with spoofing activity, although the crash had multiple contributing factors.
The episode prompted new safeguards, including coordinated market-wide circuit breakers and rules for clearly erroneous trades. It is called a flash crash because much of the extreme movement happened within minutes and markets recovered substantially the same day.