The 2010 event in which U.S. stock indexes plunged and recovered within about 36 minutes was the Flash Crash.
On May 6, 2010, major U.S. equity indexes dropped rapidly before recovering much of the loss. The Dow Jones Industrial Average briefly fell almost 1,000 points, or about 9%, during the session. Hundreds of billions of dollars in market value appeared to disappear temporarily.
Investigations found that automated trading and market conditions played central roles. A large sell order in E-mini S&P 500 futures interacted with high-frequency trading and reduced market liquidity. The precise sequence was complex, and later regulatory findings focused on how algorithms could amplify a sudden imbalance.
The Flash Crash differed from a conventional bear market because its most dramatic movement was extremely short-lived. It led to new safeguards, including circuit breakers and rules for reviewing clearly erroneous trades. The event became a major example of the risks and speed of modern electronic markets.